EUR/USD Mid-Session Analysis for October 9, 2012

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After ping-ponging between a pair of retracement zones, the EUR/USD is trading decisively lower at the mid-session. 

Early in the trading session, the EUR/USD found resistance at a 50% price level at 1.2987 and a downtrending Gann angle at 1.2997. This resistance cluster encouraged fresh selling pressure that drove the market into another retracement zone at 1.2937 to 1.2905. 

Daily EUR/USD Chart

Daily EUR/USD Chart

The first level at 1.2937 stopped the break, garnering some light buying interest that triggered a “soft” intra-day retracement. After this rally failed, new sellers emerged, causing earlier intraday support to fail. This fueled a break through an uptrending Gann angle at 1.2923 and into a Fibonacci level at 1.2905. 

Selling pressure continued as all of the potential support levels failed to attract any substantial buyers. At the mid-session, a combination of fresh short-selling and profit-taking drove the EUR/USD to the low of the session at 1.2906, setting up the currency pair for a late-session test of another uptrending Gann angle at 1.2863. 

Although the main trend is technically still up, today’s action suggests a shift in power to the short-sellers. Unless buyers step up to defend support levels, the daily trend may change to down by the end of the week.

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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.

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