Fed Press Release: (html)
EUR/USD Daily Chart 9/13/2012 2:55PM EDT
QE3 Reaction: With the Fed launching QE3, the market is hammering the USD across the board. The euro is also continuing it’s recent rally against the US dollar. The 1.30 level will be a very psychological resistance as well as a previous pivot seen in the daily chart. The 1H chart shows the acceleration after a session of narrow consolidation.
1.30 Providing Resistance: As Bernanke answers questions on the the Fed’s latest addition of stimulus, the market is testing the 1.30 handle. It appears to be decelerating a bit here, but there are no signs of reversal. A break back below previous intra-session high at 1.2936 can be an initial sign of exhaustion, which suggests at least some short-term correction to the downside. A break below 1.2855 (the low during the initial QE3 reaction) could be part of the buy-the-rumor-sell-the-news scenario. This scenario first exposes the 1.2750 pivot seen in the daily chart.
EUR/USD 1H Chart 9/13/2012 2:50PM EDT
Bullish Scenario: The bullish scenario goes along with the trend, and is aligned with the QE3 affirmation. With the current momentum, a break above 1.30 is likely. If the market clears 1.3005, the next key resistance will be a previous resistance pivot near 1.3270, which is likely near a key declining trendline seen in the weekly chart.
EUR/USD Weekly Chart 9/13/2012 3:00PM 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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