EUR/USD 4H chart 5/29/2013 8:35AM EDT
(click to enlarge)
Consolidation: EUR/USD is in a large consolidation between 1.2744 (2013-low) the 1.3240 (April-high). It is in the bottom half of that consolidation, below 1.30, forming a triangle. The 4H RSI stuck between 40 and 60 reflects consolidation momentum. A break to tag 30 or 70 should reflect new directional momentum.
Breakouts: Knowing that there is consolidation outside of our triangle, the break from congestion is not that significant and simply opens up the boundaries. At the moment, a break below 1.2850 would break below the triangle, and open up 1.28 handle down to the 1.2744 low as support. Above the current high on the day at 1.2976, we open up the 1.3030 up to 1.3050 resistance area, before opening up highs at 1.32 up to 1.3240.
Some scheduled event risks that can push EUR/USD out of these ranges are 1) US preliminary Q1 GDP data on Thursday, 2) ECB interest rate policy meeting next Thursday, 3) US NFP next Friday.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.