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EUR/USD 4H Chart 11/22/2012 6:50AM EST

EUR/USD 11/22/2012 4H chart

Broken trendline: Following yesterday’s (11/21) attack of resistance around 1.2830, the EUR/USD broke higher during the 11/22 Asian-European session, most importantly breaking above a falling trendline and 38.2% retracement. The RSI in the 4H chart also pushed above 60, reflecting loss of bearish momentum established since the decline that began mid-October. As we get ready for the 11/22 US session, the EUR/USD is cracking a previous support/resistance pivot near 1.2880, with the 1.29 handle in just ahead. Note also that 1.29 is 50% retracement of the 1.3138-1.2661 down swing.

The US celebrates Thanksgiving, so the 11/22 US session will have lower than usual volume. But sometimes that means some orders can dominate price change. The 1.29 area is going to be key. Ability to break above it takes away the bearish outlook, in the medium term even though it might be near-term overbought and due for a correction. The focus will be on 1.30, above which the outlook could return to bullish, at least with focus on the October and September highs at 1.3138 and 1.3170.

Even if 1.29 holds, the EUR/USD has turned sideways from bearish, so downside outlook should be shelved in the short-term with 1.28 to monitor for support. A break below 1.2750 might be needed to refocus on the 1.2661 low.

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.

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