Euro (€) / US Dollar ($) (EUR/USD) Mid-Session Update for March 4, 2013
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Daily Chart
Daily EUR/USD Chart
The EUR/USD is trading flat at the mid-session, but its inability to follow-through to the downside after Friday’s sell-off suggests there may be a slight upside bias developing. Conventional chart pattern analysis has support at 1.2997 and 1.2966.
Regaining the former low for the year at 1.2997 indicates that Friday’s move through this level was likely sell stops rather than fresh shorts. If it was fresh shorts then these traders could become trapped, leading to the possibility of a near-term short-covering rally.
Based on the short-term range of 1.3161 to 1.2966, the first upside target is 1.3063 to 1.3087. Downtrending Gann angle resistance is at 1.3081 and 1.3113 today.
Since traders have been selling the retracements then look for shorts to re-emerge following a test of 1.3063 to 1.3087. A failure to stop in this zone will be the first sign that the selling is greater than the buying. This could trigger a further rally to 1.3168 to 1.3203.
The main trend is down. A trade through 1.3161 will turn the main trend to up on the daily chart.
If the selling pressure resumes then look for a possible test of a major 50% price level at 1.2895.
Hourly Chart
Hourly EUR/USD Chart
After straddling a retracement zone at 1.3003 to 1.2995 and building a support base, the EUR/USD is breaking out to the upside through a downtrending Gann angle from the 1.3100 top. This angle comes in at 1.3013 this hour and 1.3010 the next. Although this breakout doesn’t mean the trend is turning up, it is a strong indication that the buying is greater than the selling a current price levels.
Now that the Euro has built a solid support base and if it could sustain the rally through the Gann angle, the next upside target is a retracement zone at 1.3033 to 1.3049.
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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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