Previous: EUR/USD Supported at 1.32; Looks to Retest 1.3320 (2/21)

EUR/USD

After bouncing up from 1.32, instead of rallying to 1.33-1.3320 resistance area, the EUR/USD traded into a congestion triangle seen in the 1H chart. It should be noted that USD has been gaining across the board against the GBP, AUD, NZD, CAD, JPY, but not against the EUR, and CHF. EUR/USD’s momentum can be described as neutral at the moment, as the 1H RSI reading is stuck between 60 and 40, and is wavering around 50. From congestion comes breakout and that is the next stage the market will  be monitoring for as the 2/22 US session continues.

A return of the RSI will be needed to confirm a breakout to the upside and a subsequent attack at the 1.30-1.3020 area. The downside outlook is against the recent trend, but an RSI reading breaking below 40 would suggest loss of bullish momentum and open up a bearish correction scenario. Price should break below 1.32 in this outlook, in which case a return to 1.31 could be an anticipated in the very short-term.

Fan Yang CMT is a forex trader, analyst, educator  and Chief Technical Strategist of 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.