EUR/USD Mid-Session Analysis for October 18, 2012

Get Forex buy/sell signals directly to your email and by SMS.
To learn more click here

It looks like the EUR/USD is going to finish the week on a weak note as traders take profits ahead of this week-end’s European policymakers meeting. On Tuesday and Wednesday, the Euro soared against the dollar after breaking out over a downtrending resistance line. This encouraged both short-covering and fresh buying, sending the Forex pair toward the September 17 top at 1.3172.

On Wednesday, the EUR/USD reached a high of 1.3139, but selling pressure stopped a follow-through rally on Thursday at 1.3128. This slight hesitation raised concerns among long-traders, encouraging them to take profits. Since the main trend is up, the expected move is likely to be corrective in nature rather than a trend changing event.

Daily EUR/USD Chart

Daily EUR/USD Chart

The first downside target is an uptrending Gann angle at 1.3025. Based on the short-term range of 1.2825 to 1.3139, value-based traders should look for a corrective move into a retracement zone at 1.2982 to 1.2945.

With nothing major expected to come out of the European summit, EUR/USD traders should watch for a sideways trade to develop over the near-term. This could mean the market will straddle the retracement zone at 1.2982 to 1.2945 for several days before attempting to establish support. A failure to hold this level could be a sign that either the Spanish debt request is off the table or the EU ministers are going to refuse aid to Greece. 

Want to read more articles like this one?
Enter your e-mail address and read FX Empire content directly from your inbox.
 
We value your privacy. Your e-mail address will not be shared.
About: FX Empire Analyst - James Hyerczyk

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.

  View all of FX Empire Analyst - James Hyerczyk's Articles    
Share Your Thoughts: Post a Comment


Your email address will not be published.