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EUR/USD Picking up Momentum

The rally in October from 1.25 to 1.2791 is picking up momentum. Price has crossed above a falling trendline, and is now holding above it as support. It is doing the same thing to the 50-period SMA in the 4H chart, now trying to push back above the 100-period SMA. More importantly the 4H RSI has held above 40 after tagging 70, which shows that it is maintaining its nascent bullish momentum. 

EUR/USD 4H Chart 10/13(click to enlarge)

This week, price is holding above 1.26 with the RSI holding above 40, showing there could be another leg to this EUR/USD bullish correction. 

Now, if price fails to hold above 1.26, and falls below the 1.2570 support pivot, EUR/USD will likely be in a bearish continuation. If price breaks above 1.28, it opens up a resistance pivot in September at 1.2991 up to the 1.30 handle. 

EUR/USD Weekly Chart 10/13(click to enlarge)

The weekly chart shows that we have not had much of a correction or consolidation since falling from 1.3993. With the RSI in oversold condition however, we might expect some consolidation in the short-term. If price does rally and approaches 1.30, we can start anticipating sellers, all the way up to the falling trendline from July, which would probably reside just above 1.30. As long as falling trendline is intact and the daily RSI is below 60, there is still downside risk toward.

1) 1.2460. 78.6% retracement
2) 1.2286, support pivot
3) 1.2042, 2012-low.