Forex Technical Update
EUR/USD 1H chart 5/4/2012 10:40AM EDT
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.
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.
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