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The EUR/USD is trading slightly better at the mid-session following early session weakness. Oversold conditions may underpin the market today, leading to a higher close and a reversal bottom.
Based on the main range of 1.2465 to 1.3172, the next downside target is 1.2818 to 1.2735. Early in the trading session, the market crossed over to the bearish side of an uptrending Gann angle at 1.2892, but buyers stepped in at 1.2833 to help right the ship. At the mid-session the EUR/USD is trading at 1.2889 which puts it in a position to post a gain for the day.
Since the Euro has been trading lower against the U.S. Dollar for 7 days, conditions are ripe for a closing price reversal bottom on the daily chart. If this occurs then a new short-term range will form between 1.3172 and 1.2833, creating a possible near-term retracement target at 1.3172 to 1.2833.
A downtrending resistance angle from 1.3172 has kept a lid on any rally since forming the top on September 17. This angle is at 1.2892 today. Besides a reversal bottom, a close over this angle will be a strong indication that sentiment is shifting back up.
The fundamentals suggest that conditions are turning bearish and that the market is ripe for another break. Current chart conditions indicate, however, that the EUR/USD may have to retrace to the upside before turning back down.