Forex Technical Update

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EUR/USD 1H Chart 10/24/2012 8:25AM EDT

EUR/USD 10/24/2012 1H chart

Crossroad: In the previous update, we noted that the EUR/USD is still at the crossroad between two converging trendlines, one falling from May 2011, and one rising from July 2012.

Bullish divergence at trendline: In the short-term we have observed a little more than a week of decline. The 1H RSI has tagged 30 to show bearish momentum in the very short-term. However, it is showing bullish divergence as the EUR/USD tags a projected falling trendline support. So far we have gotten a few bullish candlesticks out of this technical setup, but it is unclear whether a real reversal can develop here.

Room to the downside: Held under 1.30, the EUR/USD will have focus on the rising trendline from July, which it is likely to meet around 1.2850, so there is still further room to the downside before we have to consider major support.

Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

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