Previous: Can EUR/USD Continue Higher After Stalling Today? (10/18)
EUR/USD 1H Chart 10/19/2012 9:30AM EDT
Channel, flag: The EUR/USD topped off yesterday 10/18, and continues to correct against the latest upswing that started last week from 1.2825. The 1H chart shows the decline within a channel, or if this is just a correction pattern, it could become a a flag pattern. A break above the flag pattern, and above the 1.3085 area could be a bullish continuation signal in the short-term.
Support: Until the break above the near-term correction pattern, the focus toward some of the recent support factors. The first one is near the 38.2% retracement at 1.3017, which is also near the Oct. 16 support pivot. Not a major support, but could offer some demand nonetheless. Last week’s high at 1.2996 might be a more important support. Holding above this and 1.30 would be a good sign of continuing bullish development. The bullish outlook gets a bit cloudy below 1.2995. The 1.2980 coincidence of 200-hour SMA and 50% retracement might provide some support as well.
Breakouts: The bearish outlook creeps back into the picture if this “correction” extends below 61.8% retracement, 1.2940, and the rising trendline going back to May 2012. The bullish outlook is also limited at the moment to a declining trendline going back to March 2011. So it might be prudent to start monitoring these trendlines for directional clues in the medium term, outside of these short-term swings we have been observing since mid-September.
EUR/USD 4H Chart 10/19/2012 9:33AM 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.
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.
