EUR/USD 1H Chart 9/25/2012 7:05AM EDT
The EUR/USD continues to make lower highs and lower lows. After a week pull back to start the 9/25 session, it fell further in the early European session into new lows slightly below 1.29. Price action is falling in a bit of congestion as the latest speed (trend) lines are showing in the 1H chart.
Has the bearish correction lost gas? A rally back above 1.2955 would end the pattern of lower highs and lower lows as well as break out of the near-term congestion. Therefore just a break above 1.2955 in the 9/25 US session could refocus the pair to the upside.
Momentum: The 1H RSI reading last week was able to tag 30, where it has stayed above 30 this week so far, which shows weaker bearish momentum this week than the last. The 4H chart shows even less bearish momentum. In fact the RSI reading is still sitting around 40. The RSI has not been back below 40 since tagging 70 at the beginning of the current medium term rally that started late July.
Support: Some support factors were mentioned in the previous update, including a minor one at 1.2875, but more importantly a rising trendline that use to be resistance, and could be monitored for support. Then there is a support/resistance pivot at 1.2815, and 1.2750. The EUR/USD’s bullish bias remains until a break below the rising trendline that goes back to July. This might require a break below 1.2650.
EUR/USD 4H Chart 9/25/2012 7:10AM 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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