Daily Technical Update
May 12, 2010

EUR/USD Finds Support at 1.26 For Now

4H and 1H: Our target on Monday’s update was 1.2620. The market declined to a low of 1.2605 during the Asian session. The European session gave the pair support as it is approaching a previous low of 1.2560.
We see that in the 1H time-frame, there is a possible negative RSI reversal, which suggests a swing projection back again to test the 1.2600 low.
The 4H time-frame has shown a negative reversal since Monday and suggests a projection to 1.2350. If the 1.26 area breaks, we may see a swing towards this target (1.2350).
A less likely bullish scenario is in contention if the market forms a head and should should it break above 1.2750.
Remember that we can be in consolidation mode, with bearish bias. So if the market breaks above 1.2750, see if there is topping action below 1.290.

Weekly: The weekly chart shows the market near the 2008 low, which is just about 1.2350.
The RSI is in major bearish mode showing no signs of slowing in this long-term look.
Fan Yang
Currency Analyst
Commodity Trading Advisor

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