EUR/USD 4H Chart 11/26/2012 7:41AM EST
Bullish momentum: The EUR/USD has picked up steam since finding support at 1.2661 on 11/13. It has broken above a declining trendline from October. Price has pushed above some key resistance pivots, the 200-4H SMA (as well as the 200-day SMA), and the 61.8% retracement level. The 4H RSI reading has pushed above 70, showing possible nascent bullish momentum.
1.30: The recent bull run goes against the bearish swing since October, from a 1.3138 resistance pivot, but goes in the direction of a bull run from the Jul low of 1.2042, to September’s high of 1.3170. The bullish outlook therefore has some wind on its back. There is resistance at the 1.30 psychological handle, up to the resistance pivot at 1.3020. I see this area as the “last line of defense” before the picture looks bullish again, with the 1.3138 and 1.3170 highs as very short-term targets. Test of the latter target is likely going to be coincident with test of a key declining trendline resistance that goes back to 2011.
Support: At this point, if the EUR/USD is to be bullish, it should see support at a previous pivot in the 1.2875-1.29 area. A break below 1.2870 makes the outlook unclear, and a break below 1.28 reflects bears defending, and brings the 1.2660 low and 1.2690 support pivot in sight for the short-term.
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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