Forex Analysis: EUR/USD Pauses Bearish Correction Around Key Support

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EUR/USD Daily Chart

EUR/USD (daily chart) has tentatively paused its bearish correction of the past week at strong support around the key 1.3000 support region. This occurs after price reached a double top last week and turned down, respecting important resistance around the 1.3300 area. In the process of dipping down to 1.3000 support, price has also approached a key bullish support trend line extending back to the July 2012 1.2041 low, as well as the 50-day moving average. With this strong confluence of support around 1.3000, price can be considered to be at a critical juncture. In the event of a bounce off this 1.3000 support, the 1.3300 region could once again serve as potential upside resistance on a recovery of the current pullback/retracement. If the 1.3000 support confluence is broken to the downside, which could break or disrupt the bullish trend extending back to July 2012, price could move towards further potential support around the 1.2800 price region.

James Chen, CMT
Chief Technical Strategist
FX Solutions

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About Author

James Chen is Chief Technical Strategist for City Index Group. He is also a Chartered Market Technician. He is the author of the books: "Essentials of Foreign Exchange Trading" (John Wiley & Sons, 2009) and "Essentials of Technical Analysis for Financial Markets" (John Wiley & Sons, 2010). Mr. Chen writes currency analysis, leads forex trading seminars and has appeared in numerous major financial media outlets, including CNBC, Bloomberg TV, Forbes, Reuters, Dow Jones, and the Associated Press.

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