Forex Technical Update
EUR/USD 1H chart 1/28/2013 8:50AM EST
Flag consolidation: The EUR/USD is developing somewhat of a flag pattern as it consolidates just under the 2012-high of 1.3485. This "flag" is a little premature as it lacks establishment of support, but the resistance has been established in a very short-term trendline. Looking at the 1H chart, the grey box represents last couple of week's range, which EUR/USD broke above to end last week (1/25). Note the RSI holding above 40 and tagging 70, signs of bullish momentum development. It has held above 40 again and is about to break above 60, which would be a continuing sign of bullish momentum. Price is also attacking the resistance of this premature flag pattern.
A break, which is occurring as I wrap up this post, focuses on the 1.3480-85 area, as well as the 1.35 psychological handle, continuing a bullish trend that has started in July 2012. Failure to clear the flag pattern, or strong rejection at the 1.3480-85 area can continue the short-term correction stage, which has the 1.34 handle to test as possible resistance turned support.
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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