A more technical look at the markets from InterTrader
Tuesday saw the EUR/USD post remarkable gains, as positive market sentiment pushed the pair above the $1.24 level to close at $1.2469.
FX spread betting markets around the globe are heading for a bull-run amid rising speculation that political leaders can carve out a plan to tame the crisis in the Euro region.
Due to this, the meetings between leaders in Europe are likely to set the tone for the price action this week.
Europe, however, has taught us one lesson recently. Every time signs of hope enter the marketplace, they always get squashed by someone. This could, once again, only be a matter of time.
EUR/USD Forex Chart
The pair is currently trading right under the resistance level at $1.25 and there is strong resistance all the way up to $1.27.
With the Federal Reserve soon to release the minutes from its last meeting and with no signs of quantitative easing in the horizon, there is a possibility that the pair could sell-off.
$1.2421 is the near-term support level for the bears to watch.
The pair is currently at the top of a rising wedge and the RSI is approaching overbought levels on the daily chart.
Taking these into consideration, the technical set up suggests that the recent upward movement may be matured and further upside could be limited.
A break below the $1.2421 level could open the door for further movement all the way down to $1.2280.
For information on forex trading, view the forex trading guide.
Good luck and happy trading
Dafni Sedari, InterTrader
(Original article written 22 August 2012).
Spread betting and CFD trading carry a high level of risk to your capital and you may lose more than your initial investment. Spread betting and CFD trading may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.