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.
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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