EUR/USD 1H chart 1/30/2013 6:40AM EST
Acceleration, stops hit: In the previous update of EUR/USD, I noted a break above a consolidation range, and test of the 1.35 handle. The market did stall there for part of the US session, but eventually broke above. I noted that since this was a resistance area around the 2012 high, that a break could trigger stops and cause a sharp move, without a throwback. This appears to be the case at least for now as EUR/USD rises sharply, stalling around 1.3550 as we get ready for the 1/30 US session.
There still can be a throwback. The 1H RSI is above 70 showing near-term overbought conditions. But be careful trying to pick the top. At this point only a return back below 134.50 should bring in any early consideration of a reversal and that is still premature in my opinion.
Target, 200-week SMA, resistance: As far as the next possible target, resistance, we have to look at the weekly chart. We see that we are trading right at the 200-week SMA. Clearing this is a reflection that EUR/USD has turned bullish since July 2012. The RSI has pushed above 60 to show loss of bearish momentum set by the 2011 to 2012 decline. 61.8% retracement of this decline is around 1.3825, and near a previous support pivot, that might be tested as resistance.
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.