Forex Technical Update

EUR/USD 1H chart 1/29/2013 9:45AM EST

EUR/USD 1/29/2013 1H chart

Consolidation: The EUR/USD failed to extend after breaking above a small flag pattern during the 1/28 US session. The consolidation high held, and price came back to crack its consolidation low during the 1/29 European session. During the 1/29 US session it surged from the new low, to a new high, breaking above the consolidation high.

Momentum: Note that the 1H RSI reading held above 40, reflecting maintenance of bullish momentum. With it going above 60, it is a sign of bullish momentum revival.

Target: 1.35 will be a key psychological handle to break for further bullish outlook. If this is the case, taking the width of the range, a conventional breakout target projects to about 1.3530. Note the mini-consolidation in the middle of the range. This is the central pivot area. If there is a throwback, and the market can stay above this area (around 1.3450, then the bullish outlook still looks good. Otherwise, we might have a false breakout to the topside.

If the bullish break does occur, I suspect there are many stops up here since it is just above the 2012-high. If so, and these stops get triggered, we can get quick a pop before a throwback. Let’s see.

The EUR is very strong right now. You can see EUR/JPY also trying to break out of its flag pattern.

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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