EUR/USD 4H Chart 10/15/2012 7:50AM EDT
Congestion: The EUR/USD started this week falling away from the 1.30 psychological handle, but found support just below 1.29 during the beginning of the 10/15 European session. It has since rallied back with focus on the 1.30 handle. The overall structure of the EUR/USD has turned into that of congestion as it makes lower highs since the 1.3170 high, and higher lows since the 1.2804 low.
Bullish scenario: A break above 1.30 is not enough for the bullish outlook, a break above the congestion resistance near 1.3025-1.3030 would be the first sign.Then ability to hold above 1.30 focuses the market on the resistance pivots at 1.3070 and 1.3170.
Falling trendline: However, if it does approach 1.3170, the focus is not only on it as the resistance pivot, but as an area where price will meet a key falling trendline going back to May 2011. The break above that trendline is going to be a game changer. It can open up the 1.3487, 2012-high.
Momenutm: In the weekly chart, this bullish scenario will probably push the RSI above 60, which would reflect a loss of bearish momentum is had established with the fall since the 1.4940 2011-high.
EUR/USD Weekly Chart 10/15/2012