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EUR/USD Threatening a Triangle Resistance

The EUR/USD fell to 1.2860 this week and then consolidated. In the 1H chart we can see a bit of congestion, or triangle pattern development. Price is pushing above the 100-, and 50-hour SMAs, and trying to break above the triangle. The RSI has pushed above 60, and shows that the bearish momentum is getting shaky. Maybe we are in for some meaningful consolidation, or bullish correction.

(EUR/USD 1H Chart 9/11)

If we do get a bullish correction, we should first monitor the 1.2988 handle. If price continues to squeeze above that, the next level to monitor for sellers might be the 1.31-1.3110 area, which contains the 1.31 psychological level, a previous support pivot, and the 100-period SMA in the 4H chart. There is still downside risk toward the 1.28 area, which is just above the highs from late March through July of 2013.

(EUR/USD 4H Chart 9/11)