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The EUR/USD is trading better at the mid-session, bolstered by positive developments in the Euro Zone. The trading action has helped form a short-term range between 1.3172 and 1.2919. This range has created a retracement zone at 1.3045 to 1.3075. The market found resistance at the 50% level at 1.3045, making it the high of the day.
The market showed early signs of strength when it took out a downtrending Gann angle at 1.3012 but the rally stalled at a 50% price. A close over this angle will be a sign that sentiment is shifting back up, making another Gann angle at 1.3092 a potential upside target.
Earlier in the week, the EUR/USD formed a potentially bearish closing price reversal top on the daily chart. Although this pattern doesn’t represent a change in trend, it often leads to a 50% correction of the last rally. Based on the near-term range of 1.2465 to 1.3172, the next potential downside target is 1.2817 to 1.2734.
Before the market can reach this zone, however, the EUR/USD has to take out a pair of uptrending Gann angles at 1.2902 and 1.2825.
While the daily chart is indicating a choppy, two-sided trade, the weekly chart is in a position to reverse to the downside. A close below 1.3128 today could mean the start of a 2 to 3 week correction.