10/26/2012 – EUR/USD has made a tentative breakdown of an uptrend support line that extends back to the July 1.2040 low. This unconfirmed breach occurs as the 200-day and 100-day moving averages have just touched, preparing for a potential crossover to the upside for the first time since the bearish crossover occurred one year ago. This moving average cross is currently just above the key 1.2800 support region, and serves as potential support for any further bearish correction. The 1.2800 level and the 200-day moving average have in conjunction served as a strong support confluence on two occasions within the last month. To the upside, a bounce off support (supplied by either the trendline, the moving average, or the important 1.2800 level) that moves back above the key 1.3000 psychological level could once again rise towards a resistance retest of the September 1.3170 high, with a longer-term potential upside objective around the 1.3500 price region.
James Chen, CMT
Chief Technical Strategist
FX Solutions
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