EUR/USD Below 1.29 after Topping; A Look at Support
By Fan Yang | November 29, 2012 1:11 AM EST
Forex Technical Update
EUR/USD 1H Chart 11/28/2012 7:15AM EST
Topping: Following up with yesterday's observation of EUR/USD's consolidation, the pair failed to push above the central pivot at 1.2970, and fell slowly during the 11/27 session as well as the 11/28 Asian session. It sped up and fell below 1.29 as we gear up for earl 11/28 US session. The RSI fell below 30 showing near-term bearish momentum. After the November bull run from 1.2660 to 1.3007, we are in a period of consolidation/correction.
Retracement target: As we fall in correction against the November rally, the first key retracement target of 38.2% is at 1.2875, which could be tested during the 11/28 US session. The 4H chart shows that this is just below the 200-4H SMA, and coincident with a pivot at 1.2877. Then the next retracement target area is between 50% and 61.8% (1.2834-1.2793). Also, if the momentum seen in the 4H chart remains, the RSI reading there should hold above 40.
Outlooks: A break below 1.2790 could re-introduce the bearish outlook, with 1.2660 low and 1.26 handle in sight. Otherwise, the current decline is just a retracement in a bull run that has 1.3137 and 1.3170 highs in sight. In fact, if the EUR/USD fails hold below 1.29 during today's US session, and can push back above 1.2950 soon, it would be a sign that the correction has found its lower bound around 1.29, and the focus remains bullish with bullish momentum in the 4H chart.
EUR/USD 1H Chart 11/28/2012 7:20AM EST
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.
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