EUR/USD 1H chart 1/18/2013 9:05AM EST (click to view full size)
Consolidation Range: The EUR/USD started this week with an attack of the 1.34 level but failed to clear it after tagging 1.3403. It then fell to 1.3255 and found support, consolidated a little, and then rallied again to test the 1.34 resistance. It held during the 1/18 Asian-European session. As we wind down the week with the 1/18 US session, we see the EUR/USD in a larger general consolidation zone between the 1.3245 support (from Jan.10), and the 1.3403 resistance (from Jan.14).
Bias, targets: Ability to stay at the upper half of the consolidation zone would be a sign of bullish bias, but a push back below 1.30 for example should cause the market to focus on the 1.3245-1.3255 support area. Now further push below 1.3245 would open up a double top scenario for further bearish outlook. It would also break below the 200-hour SMA. Then you have the 1.32, 50% retracement and 61.8% retracement of 1.3150, which is reinforced by the December support pivot.
At this point, a hold above 1.33 and a push above 1.3350 refocuses on 1.34. A break above 1.3405 should revive the bullish outlook that has been the bias at least since Nov. 2012, with the 2012 high of 1.3485 in sight.
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.