A Kilroy Attempt Spotted in the EUR/USD

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A Kilroy Attempt Spotted in the EUR/USD

EUR/USD is seeking a price bottom as we can see in the 4H chart. We can say that the pair broke above a triangle that was completed last week. We can also see that there is also an inverted head and shoulders pattern with the neckline at 1.2987.

EUR/USD 4H Chart 9/15
eurusd 4h chart 9/15

(click to enlarge)

Consolidation, Bullish Correction, Upside Risk:
If this price bottom sticks, EUR/USD might be in the middle of a meaningful consolidation or bullish correction. In this scenario, there is upside risk toward the 1.3110 support pivot and possibly the 1.3160 support/resistance pivot.

When we look at the 1H chart we can see that price crossed above the 100-, and 50-hour simple moving averages. If price falls below 1.2920, EUR/USD will be back below these SMAs, and that would revive the bearish outlook. Also, we can see that the bullish outlook is still being challenged as price tests the 200-hour SMA.

The 1H RSI has tagged 70, held above 40, and tagged 70 again. This shows bullish momentum building. So, if price can hold above 1.2920, and the 1H RSI can hold above 40, EUR/USD could have upside risk toward 1.3110, 1.3160 this week.

EUR/USD 1H Chart 9/15
eurusd 1h chart 9/15

(click to enlarge)

Downside Risk, Key Support Area Around the 2013-Lows:
Whether we have a consolidation or not this week, the EUR/USD is bearish in the medium-term. When we look at the weekly chart, we can see that price might still have a little room to fall before the common lows around 1.28 from 2013. The 2013-low was 1.2745 and is not a stretch for the current downtrend.

The weekly chart below shows these 2013-lows, and also shows that the fibonacci retracement level of 61.8% resides at 1.2787. This 1.2750-1.28 area is thus a key area, and we should expect some consolidation either above or around this area.

EUR/USD Weekly Charteurusd weekly chart 9/15

(click to enlarge)

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.