Previous: EUR/USD in Consolidation with Bearish Bias (7/10)

EUR/USD 1H Chart 7/11/2012 7:30AM EDT

The EUR/USD fell broke below a 1H channel or flag pattern in the 4H time-frame, and into new lows for 2012 during the 7/10 session. After It found support just above 1.2230 it pulled back to 1.23 during the 7/11 Asian-European sessions. It is stalling here ahead of the US session.

Note that the RSI reading is back to 60, where it held before breaking below the consolidation pattern.

1.23 is also in confluence with a declining trendline connect highs from 7/6 and 7/10.

There is US Trade data at 8:30AM EDT. If export and import growth both disappoints AND the trade deficit widens. This combination of negative numbers from 1 release can weigh on risk-sentiment and keep the EUR/USD under 1.23.

Then the FOMC is on tap for 2:00PM EDT. The market is a junkie for clues regarding QE3, so even if though the meeting minutes usually just reiterate what the actual meeting and Bernanke have already told us, it might still be a temporal pivot.

If the market holds below 1.23 after the initial reactions to the FOMC meeting minutes, the bearish bias remains, and the 1.2230, then 1.22 handle are the next levels to target in the next couple of sessions.

A hold above 1.23 however exposes the 1.2330 in the near-term, then the previous consolidation area from, 7/5 with resistance near 1.24.

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.