Previous: EUR/USD Tading Up Near 1.32 Consolidation Resistance (2/7)
EUR/USD
After rallying from 1.3030 to 1.3280, the EUR/USD is seeing bearish divergence with the RSI in the 1H chart. Also it has been trading at the upper bollinger band (3 standard deviations from the 200 simple moving average). Along with anticipation of a risk-event in the ECB meeting tomorrow at 7:45 AM EST (12:45GMT), the EUR/USD is set to consolidate. Price action shows respect of 1.33, holding highs near 1.3280. (The ECB press conference at 8:30AM EST will also be widely monitored)
The 1H chart shows that if there is a bearish correction, the 1.3150 area will be a key support to consider. It is in confluence with the 200 H SMA. The bearish outlook toward this target/support level opens up with a break below the 1.3230 pivot. (We should also monitor the 1.3186, 38.2% retracement level as it is also in confluence with a rising trendline).
The 15-min chart shows a market at the cusp of breaking the bullish momentum. As already know, the 1.3230 pivot is key. The RSI reading in this chart will also be key if it can first fail to rise above 60, and then fall below 40. That will give more clues to a flattening market that can lead to some bearish correction. Otherwise, there is still upside to re-test 1.3280 and attack 1.33. As I wrap up this article, the market is again attacking the 1.3230 low, with RSI cracking 40, about to open up the bearish outlook in the very short-term.
Don’t miss the IBTrade briefing that will cover both the BoE and ECB meetings tomorrow starting 8:00AM EST (13:00GMT). To gain free access to these sessions, register at here at IBTrade. You will receive and email with the link and password before each session once you have registered.
Fan Yang CMT is a forex trader, analyst, educator for IBTrade; and main contributor for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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