Forex: EUR/USD Technical Analysis 21st November 2012
(Euro/Dollar, EUR/USD Technical Update, Forex-FX-4X.com, 21st November)
1.2800 – 1.2830 EUR/USD resistance has held once again. Price moved as high as 1.2829 yesterday, prior to experiencing a near 100 pip decline. The resistance area we have been monitoring (200 period daily SMA + previous support lows) had an additional element of confluence yesterday when a bearish ABCD correction peaked at the aforementioned 1.2829 level (see the 4 hour timeframe EUR/USD chart below).
The 38.2% Fibonacci retrace of the major 1.3138 - 1.2661 move lower is located around 14 pips above yesterday’s high, at 1.2843. Adding an element of bearish weight from a technical perspective.
A bearish engulfing candle has now formed over the Asian session. The low of this bearish engulfing candle has found interim support at the 50% retrace of the latest move higher from 2-month plus lows. If looking at this from a bearish perspective, we note that this candle has formed at the previous support area which has now become resistance and this could be the initial stages of an extended rejection lower. However, the opposing point of view is that this setup is trading into multi-month lows and these bearish candle patterns are typically preferred at major swing highs.
For related analysis see our EUR/JPY technical update.
EUR/USD 4 Hour Chart - 21st November
EUR/USD D1 Chart - 21st November
Forex FX: Euro/Dollar Technical Outlook/Report – 21st November 2012