EUR/USD 4H Chart 10/2/2012 11:40AM EDT
Eying 1.30: For the first time since falling from 1.3170, the EUR/USD is showing 2 consecutive days of bullish price action unless it falls sharply to close the 10/2 session under 1.2875. As we observe the rally in the 4H chart, we see that it is cracking a resistance pivot at 1.2960. This opens up last week’s highs, which are just under 1.30. We might as well consider the 1.30 handle as the key level to watch for resistance.
Bullish outlook: The ability to push above 1.30 exposes the 1.3170 level, though we should monitor the 1.3080-1.3085 pivot area as well for resistance. It should be noted that even though the preceding trend was bullish in the 4H chart, EUR/USD has lost the bullish momentum in this time-frame, and therefore, the bullish outlook is limited to 1.3170 at max for the short-term.
1.2918, 1.2875 pivots: Can the market get behind this very short-term bullish outlook? When looking at the 1H chart, we see that the RSI is pushing toward 70, above which suggests nascent bullish momentum, though maybe near-term overbought. If the market stays above the 1.2918 pivot, the bullish price action in the 1H chart is still in command. However, below that it is not clear, and then below 1.2875, the market remain focused on the 1.28 low, and maybe lower toward a major rising trendline going back to the July-low of 1.2042.
As far as the RSI is concerned in the 1H chart, if it can stay above 40 after a subsequent throwback, the bullish momentum should remain.
EUR/USD 1H Chart 10/2/2012 11:47AM EDT