FX.co ★ EUR/USD intraday technical and fundamental review for May 22, 2013

We talked about consolidation of the pair within the price range 1.2950 -1.3240 and the importance of breakout off this zone for the liberation of the pair, now we have a pullback to this zone.

EUR bears were interrupted at Intraday support (1.2800-1.2830), failing to have daily/weekly closure below 1.2800. This enhanced the bullish retracement taking place now.

It is important to note that breakdown of support zone around 1.2950 revived a "Double-Top" pattern on the daily chart that still has final target at 1.2680.

A bullish Head and Shoulders pattern is being formed on the 4H chart with neckline located at 1.2900 to be targetting at 1.2995. However, it is important to note that price Levels 1.2950 (broken support) will probably provide Intraday resistance for the EUR/USD pair to maintain any bullish trials in the short term. Hence, price action should be watched there.

The EUR/USD pair is still bearish which needs 1.2790 breakdown to invalidate the reversal pattern. However, bullish retracement towards 1.2950 is not excluded to bring more SELLERS before further decline. Carefull price action watching is recommended there.

Fundamentally, we have positive data today; the current account surplus widened for the Euro zone to exceed the expectations of the month of March, according to official data.