EUR/USD 1H chart 8:00AM EST 1/16/2013
Top, pullback: The EUR/USD broke below a triangle in a topping attempt during the 1/15 US session. The top was established when it slid below 1.3320-1.3332 support area. It has yet to test the 1.3248, 38.2% retracement and the 1.3244 support pivot before a pullback. As we begin the 1/16 US session, we see that the pullback respecting the 1.3320 level as resistance. This adds to the bearish bias as it shows that the top is set. A break above 1.3350 however would make the top suspect.
Targets: You can’t really call this decline a trend yet. It should be considered a correction for now. The 1H RSI hasn’t even tagged 30, which means bearish momentum is still weak. If price can push below the mentioned support at 1.3244-1.3248, it opens up 1.32, 50% retracement down to 61.8% retracement at 1.3152. There is also a 200-hour SMA in between those fibonacci retracement levels. A break below 1.3150 could be a key development that opens up even further bearish outlook. It was the support from a previous consolidation area during the second half of Dec. 2012.
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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