By the beginning of the year, the euro crisis gathered all of the market attention, with Greece ready to leave the euro zone, Italy and Spain joining the club of the intolerable high yields and bailout needs, and European authorities lost without an answer. Crossing the ocean, US monthly employment readings surprise strongly up 3 months in a row, and market started screaming growth! The EUR/USD, fell as low as 1.2161 this July. However, while the EU crisis continues, at least the EU authorities had put themselves together and gave their first baby steps to fight the crisis, while in the US, the situation seems not so bright: disappointing news hit the wires daily basis for the past few months, while employment strong readings are now just a memory.
Could the EUR/USD be forming an interim bottom? Seems likely, according to the daily chart: the pair has been printing higher highs and higher lows daily basis since mentioned 1.2161 low, and is forming a round floor that may suggest an imminent recovery, at least in correction mode.
While indicators still lack upward momentum, they are steady approaching to their midlines, as price tests the neckline of the figure, around 1.2330/40: a daily close above, should lead to a stronger advance of around 180 pips according to the figure, towards the 1.2520 area. Once above, 1.2745 seems next target. I can’t see the pair reaching 1.30 anytime soon as the common currency will likely underperform compared to other currencies. Lose of 1.2161 however, will deny the figure opening doors for further slides towards 1.1870 area as immediate target for this second half of 2012.