EUR/USD 4H Chart 10:05AM EDT 6/13/2012
The EUR/USD market has been trading without clear direction this week. After jumping up to 1.2665 on the the back of the Spanish bailout, the uncertainty surrounding the rescue continued to have upwards pressure on Spanish bond yields, as well as risk in general. This risk and EUR-rally did not follow through.
If so, we are trading just below the “central pivot” near 1.2540. If it holds below this level in the 6/13 US session, the market shows bearish bias within the consolidation range, and suggests a test of the range support.
Range support is first at 1.2440, from which we have seen the market bounce 4 times since last week. We also have the 1.24 psychological and pivot support. A break below 1.24 opens up a bearish continuation scenario, with a conservative target to the 1.2285-1.23 low.
If the market climbs back above 1.2560 in the US session, we are likely to test the resistance area which starts near 1.2620, and goes up to this week’s high near 1.2665. A break above that opens up a short-term bullish outlook toward 1.2720, and maybe even 1.2820 and still be within a bearish market in the medium term.
The next key risk event is likely the Italian bond auction on Thursday, the 6/14 European session.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist of FXTimes – provider of rex News, Analysis, Education, Videos, Charts, and other trading resources.
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