EUR/USD 4H chart 2/25/2013 9:25AM EST
Falling Channel: The EUR/USD has been falling from 1.3710 throughout February, reaching a low of 1.3144 to end last week (2/22). The latest downswing cracked a rising trendline that goes back to July. However, instead of clearing it, the market consolidated around it to end the previous week. To start this week, the EUR/USD is pushed back above the trendline, and there appears to be a minor bottoming effort as we get into the 2/25 US session.
Still the falling channel is holding structure with bearish momentum. If the 4H RSI reading pops up above 60, and price pops up above 1.34, then we are likely to have a breakout from the falling channel.
Rising Trendline: The daily chart shows the market also respecting a rising trendline that goes back to July 2012, the start of the latest bull trend. As noted, we did crack the TL, but the daily chart shows eventually a reaction of support so far. Without this trendline truly broken, and the daily RSI still holding above 40, the bullish trend is still intact in the daily chart.
So we have the EUR/USD at the crossroad. Breaking above 1.34 is a sign of bullish continuation, while holding below it, followed by a swing below 1.3144 should be a sign of trendline breakdown, which suggests further bearish correction.
EUR/USD Daily chart 2/25/2013 9:26AM EST
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.