EUR/USD Rebounds off Key Support

<p>Price action on EUR/USD (daily chart) as of October 5, 2012, has made a significant push to the upside, tentatively breaking out above the important […]</p>

Price action on EUR/USD (daily chart) as of October 5, 2012, has made a significant push to the upside, tentatively breaking out above the important 1.3000 resistance level after having rebounded off key support around 1.2800 in the very beginning of the month.

This occurs within the context of a sharp upside corrective move from the late-July 1.2041 low to the 1.3170 high in mid-September. After the recent pull back that retraced to both the 1.2800 support level and the 200-day moving average, price appears potentially poised for a re-test of the recent 1.3170 high, which represented a 4-month high for the pair. In the event of a breakout above that resistance high, which potentially would confirm a continuation of the bullish correction spanning the last two months, price could see a bullish bias towards further upside resistance around the 1.3500 price region. To the downside, if price is unable to hold the strong 1.2800 support area, the next major support to the downside potentially resides around the 1.2600 price region.

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