EUR/USD 1H Chart 10/9/2012 10:20AM EDT
Short-term bearish momentum: The RSI reading shows persistent bearish momentum so far since falling from the Friday (10/5) high of 1.3070. Price action is heavy as well. The mode in the short to medium term has turned into that of consolidation, so there is no trend in this intra-day chart. In these non-directional markets, we should pay attention to key support and resistance levels.
Trendline Support: The 1.30 acted as resistance, and now the 1.2880-1.29 area is being tested as support. The upside from this area however should be limited to 1.30 while we are monitoring intra-day action. However, there is still some further downside risk until we meet a key support factor, the rising trendline from the July low of 1.2042, which has since held price action upwards.
If EUR/USD falls through 1.2880, it would probably meet this rising trendline near the previous support pivot of 1.2804, near the 1.28 handle and the 200-day simple moving average. If 1.28 fails, consider 1.2750 swing projection and previous resistance/support pivot to be a key level. A break below 1.2750 and the ability to hold under 1.28 and the 200-day SMA then introduces a bearish outlook in the medium term.
EUR/USD Daily Chart 10/9/2012 10:31AM EDT