Euro vs US dollar tentatively extends bearish correction

<p>As of October 26, 2012, the EUR/USD (daily chart) has made a tentative downside breach of a bullish support trend line that extends back to […]</p>

As of October 26, 2012, the EUR/USD (daily chart) has made a tentative downside breach of a bullish support trend line that extends back to the July 1.2040 two-year low.

This unconfirmed breakdown occurs as the 100-day and 200-day moving averages have just touched, preparing for a possible crossover to the upside for the first time since the downside crossover occurred one year ago.

Currently, themoving average cross resides just above the key 1.2800 support region, and serves as potential support for any further bearish extension. Together, the 1.2800 level and 200-day moving average have served as a strong support confluence twice within the last month.

To the upside, a bounce off support (supplied by either the trendline, moving average, or 1.2800 level) that moves back above the key 1.3000 psychological level could once again rise towards a resistance retest of the September 1.3170 high, with a longer-term potential upside objective around the 1.3500 price region.

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