Forex Technical Update

Previous: EUR/USD Near August Highs...(8/21)

EUR/USD 1H Chart 8/22/2012 6:41AM EDT

"EUR/USD

The EUR/USD broke above the August high during the 8/21 US session, also clearing some resistance factors for aconsolidation and a declining trendline that goes back to the June high of 1.2747 shown more clearly in the daily chart below.

The 1H chart shows a market that is establishing bullish momentum with the RSI holding above 40 and rising above 70 again. The moving averages are in bullish alignment in the 1H chart as well. Price action broke above last week's rangeresistance at 1.2380 and above the 1.2440 August high before settling in a flag pattern just under the 1.2490 clip.

In the daily chart you can see that the 1.2480 level is about 61.8% retracement of the 1.2747 to 1.2042 swing. The 8/22 US session will be put to the test to continue the 8/21 breakout. A break above 1.25 and a hold of a near-term corrective swing above the flag pattern's center around 1.2465 should continue another swing toward the June highs at 1.2685 and 1.2747, maybe taking a breather at 1.2550 and 1.26 in the near-term.

A break below 1.2450 however should open up more near-term throwback intent toward the 1.24 handle and the 1.2380previous-resistance area. Even in this scenario, we are still bullish until the market breaks below the 200-H SMA near1.2350.

EUR/USD Daily Chart 8/22/2012 6:45AM EDT

"EUR/USD

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.