EUR/USD Below 1.29 after Topping; A Look at Support

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By Fan Yang | November 29, 2012 1:11 AM EST

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.

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.

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