Forex Technical Update

Previous: EUR/USD Breaks Below 1.22; 1.19 2010-Low is Still in Sight (7/12)

EUR/USD 1H Chart 7/13/2012 10:15AM EDT

EUR/USD

The last EUR/USD update noted the break below 1.22, and the continuing bearish outlook toward 1.20, 1.19. 7/13 price action is saying not so fast as the 9AM EDT candle sprung from a new low for the week at 1.2158, back to 1.2240. The spike stalled a bit right after the Umich consumer sentiment survey for July, which came out at 72.00, missing forecast of 73.5, and sliding from June's 73.2 reading.

This one hourly candle engulfed the entire consolidation during the 7/12 session, and broke above this week's declining channel resistance. It is now looking toward 1.23 if 1.2250 can't hold resistance. Note that this week's high is in the 1.2320-1.2330 area.

A break above starts to shelve our bearish outlook for 1.20, 1.19, in anticipation of a significant consolidation period before the market has more fuel for the further downside.

A hold below 1.2250, and a return below 1.20 can still maintain the bearish outlook, especially since the 1H RSI reading is still holding below 60, suggesting that the bearish momentum is maintained. Then we will just call this a shakeout.

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.

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.