Euro vs US Dollar Reaches for Key Upside Resistance

<p>Price action on EUR/USD (daily chart) as of October 17, 2012, has continued its bounce off of a pivotal support confluence down around the 1.2800 […]</p>

Price action on EUR/USD (daily chart) as of October 17, 2012, has continued its bounce off of a pivotal support confluence down around the 1.2800 price region. It was actually a double-test of support, both touches occurring in the first half of October.  The second bounce, which occurred just last week, came off of a support confluence that included: the important 1.2800 support/resistance level, the 200-day moving average (SMA), and a key short-term up trend support line extending back to the July 1.2040 two-year low. After the support bounce, with price having climbed above the 1.3000 figure within the past two days, EUR/USD could soon be poised for a retest of the September 1.3170 high. Currently, this 1.3170 resistance level is positioned right around a longer-term down trend resistance line extending from the May 2011 1.4935 area high. In the event of a short-term breakout above this resistance confluence, price has a potential upside bias towards major resistance at 1.35000. Any failure to stay above the 1.2800 support level, however, could signify an end to the short-term bullish trend that the pair has been entrenched in for the last three months.

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