EUR/USD 4H Chart 8/14/2012 11:20AM EDT
The EUR/USD has been trading in a non-directional manner, unable to follow through with breaks of any short-term trendlines or pivots. Looking at the 4H chart, after breaking lower last Friday (8/10), the EUR/USD stopped short of a rising trendline.
It started this week by pushing above the bearish trendline started from last week, but price action found resistance at 1.2380, should of last week’s highs near 1.2440. As we the 8/14 US session progresses, the market is cracking a the near-term rising trendline from this week’s price action so far.
The 1.2330 pivot which was important in July is now being whipped with no consequence. For a sense of direction, it will probably be better to look at the key trendlines outside of this time-frame in the daily chart. In the daily chart we see that the pair is in a bearish mode as:
1) Price action is held below some declining trendlines, the latest of which coming down from the June high near 1.2750.
2) The moving averages are mostly in bearish alignment, except for the fact that 8-day SMA has crossed above the 21-day SMA.
3) The RSI is neutral but the ability to remain below 60 after tagging 30 reflects maintenance of the preceding bearish momentum.
The bearish continuation scenario opens up with a break below the rising trendline we have seen since July. A break above the 1.2440 level, which should clear the recent declining trendline also opens up higher July resistance pivots at 1.2680 and 1.2750.
EUR/USD day Chart 8/14/2012 11:20AM EDT
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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