Forex Technical Update

Previous: EUR/USD Holding Above 1.31 After ECB Press Conference (5/3)

EUR/USD 1H chart 5/4/2012 10:40AM EDT

EUR/USD

Through the risk events this week from both the Eurozone (ECB interest rate statement and Draghi's press conference), and the US (ISM manufacturing and services PMIs; Non-Farm Payroll), the EUR/USD has not shown a strong strong sense of direction. The 1.31 barrier held, and the market established resistance near 1.3180. However, looking at the 1H RSI reading, we see bearish momentum still maintained as it held under 60, and is about to push below 40.

Price action is returning to the attack of range support after an initial rally following the disappointing NFP for April. For a rally to hold significance, the market will not only have to break out of this week's 1.3180 range resistance, but also above the 1.32 handle. This can open up the 1.33 handle, above which the 1.3380 and 1.3480 pivots would be short to medium term targets.

However, a break below 1.31 opens up the 1.2970-1.30 support area.

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Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist of 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.