Forex Technical Update
The EUR/USD ability to stay above 1.26 and bounce back suggests a weakness in bears. It's ability to rally back above the 200 hour simple moving average, and then bounce off of it as support over the 1/18 European session is a confirmation of bull strength in the short-term. The 1H RSI reading has also so far confirmed bullish momentum, but we also see a possible bearish divergence developing, suggesting a throwback in the near-term. One can be anticipated in the early going of the US session.
Again the 1.2730 area, near 50% retracement will be possible support, but the bearish outlook does not come back in the picture until a break below 1.27. Otherwise, a push back above 1.2750 should reflect the ongoing bullish correction.
The RSI reading in the 4H chart has remained below 60 since it dipped below 30 on Oct. 30. There were moments where the RSI peeped above 60, but there were always quick rejections. Now the short-term correction has pushed the 4H RSI back to 60. The bullish outlook is still contained for now. Therefore, if this short-term bullish attempt is to extend into the medium term, there will be a necessary break of the RSI above 60, and preferably a throwback that holds above 1.27 and a return above 1.2750.