EUR-USD has been under pressure during the past several weeks as the debt crisis gets more attention and the ECB seems increasingly dovish.

The pair has consolidated higher Friday in what appears to be a Bear flag as seen below on hourly Candlesticks.

A break of the Bear flag support followed by a subsequent retest of this line as resistance suggests the potential for continued Southside action in the pair.

Plus, EUR-USD trades below the 55, 100, and 200-hr SMA's and the RSI is facing trend line resistance. The combination of Bearish short term technical's may see the pair come under renewed pressure in here.

Should it see a break below Thursday's lows, the Bear flag objectives would come into view with the 61.8% Fibo projection around 1.3310 and the 100% projection at approximately the 1.3150 mark.

The trade presents a better than 2-to-1 reward to risk ratio as a move back above the 1.3570 area in EUR-USD or break of the hourly RSI above its falling resistance line would negate this technical set up.

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EUR USD Chart with HCM Custom Indicators

Paul A. Ebeling, Jnr

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.