Euro (€) / US Dollar ($) (EUR/USD) Mid-Session Update for March 1, 2013
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Daily Chart
Daily EUR/USD Chart
The EUR/USD is trading lower at the mid-session. Earlier in the session the market took out a bottom at 1.3018 to reaffirm the short-term downtrend and the low for the year at 1.2997 to erase all of this year’s gains.
Today’s move confirmed the closing price reversal top on the monthly chart, setting up a potential 2 to 3 month correction into 1.2876 to 1.2679.
Although the main trend is down on the daily chart, oversold conditions could still generate periodic short-covering rallies. During the course of the recent break from the top at 1.3711, the EUR/USD has had periodic retracements that have been met with renewed selling pressure. The market will continue to decline until this chart pattern changes.
Based on this conclusion and the short-term range of 1.3161 to 1.2966, traders should look for a retracement back to 1.3063 to 1.3087. If the market is going to move lower, short-sellers are likely to show up in this zone.
Additionally, downtrending resistance angles at 1.3121 and 1.3153 are guiding the market lower at a pace of .004 per day. These angles are also important trend indicators. Breaking them and crossing over to the strong side of these angles will indicate the start of a much stronger retracement. The main trend will remain down according to the swing chart as long at the swing top at 1.3161 holds as resistance.
Hourly Chart
Hourly EUR/USD Chart
The main trend is down on the hourly chart. The main trend turned down when the swing bottom at 1.3059 was violated overnight.
Based on the short-term range of 1.3100 to 1.2966, the first retracement target was reached when the market traded at 1.3041. The target zone is defined as 1.3033 to 1.3049. Additional resistance is on a downtrending Gann angle at 1.3040.
The subsequent break from the retracement zone drew support at an uptrending Gann angle at 1.3016. A break of this level could trigger a further decline to 1.2991.
The short-term range is 1.2966 to 1.3041. This creates a retracement zone and potential support area at 1.3003 to 1.2995. Counter-trend traders should look for a possible support cluster at 1.2995 to 1.2991.
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James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.
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