EUR/USD Mid-Session Analysis for October 12, 2012

By FX Empire Analyst - James Hyerczyk
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The EUR/USD is following through to the upside after Thursday’s closing price reversal bottom. Today’s upside momentum was strong enough to take out a pair of minor retracement levels at 1.2948 and 1.2977. Additionally, the market broke through a downtrending Gann angle at 1.2971. All of these moves indicate strong buying.

Daily EUR/USD Chart

Daily EUR/USD Chart

The strength of the market is also being determined by the fact that the rally is moving up at a pace of .008 per day. This places the support angle at 1.2928, followed by a slower moving Gann angle at 1.2877.

Now that the resistance zone has been penetrated, traders should watch for a drive into another downtrending Gann angle at 1.3021. Looking at the bigger picture, a downtrend line connecting the 1.3172 and 1.3071 tops is at 1.3032. Since this trendline has been battle-tested and proven to be solid resistance in the recent past, traders should watch for a technical bounce following a test of this price. A breakout through this trendline, however, is likely to trigger an acceleration to the upside.

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