EUR/USD 4H Chart 11/22/2012 6:50AM EST
Broken trendline: Following yesterday’s (11/21) attack of resistance around 1.2830, the EUR/USD broke higher during the 11/22 Asian-European session, most importantly breaking above a falling trendline and 38.2% retracement. The RSI in the 4H chart also pushed above 60, reflecting loss of bearish momentum established since the decline that began mid-October. As we get ready for the 11/22 US session, the EUR/USD is cracking a previous support/resistance pivot near 1.2880, with the 1.29 handle in just ahead. Note also that 1.29 is 50% retracement of the 1.3138-1.2661 down swing.
The US celebrates Thanksgiving, so the 11/22 US session will have lower than usual volume. But sometimes that means some orders can dominate price change. The 1.29 area is going to be key. Ability to break above it takes away the bearish outlook, in the medium term even though it might be near-term overbought and due for a correction. The focus will be on 1.30, above which the outlook could return to bullish, at least with focus on the October and September highs at 1.3138 and 1.3170.
Even if 1.29 holds, the EUR/USD has turned sideways from bearish, so downside outlook should be shelved in the short-term with 1.28 to monitor for support. A break below 1.2750 might be needed to refocus on the 1.2661 low.