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