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EUR/USD Mid-session Technical Analysis for February 8, 2016

By:
James Hyerczyk

The EUR/USD is trading higher at the mid-session. The market is posting an inside move which indicates trader indecision and impending volatility. Some

Daily EUR/USD

The EUR/USD is trading higher at the mid-session. The market is posting an inside move which indicates trader indecision and impending volatility. Some traders want to short in reaction to last Friday’s mixed U.S. employment report. Others are going look because of the weaker stock market and refunding.

Daily EUR/USD
Daily EUR/USD

The main trend is up according to the daily swing chart. However, Friday’s closing price reversal top may be an indication that momentum is shifting to the downside. Taking out 1.1108 will confirm the potentially bearish reversal. This could trigger the start of a sharp break and a serious shift in investor sentiment.

The main range is 1.1494 to 1.0539. Its retracement zone is 1.1129 to 1.1017. These levels are new support.

The short-term range is 1.0777 to 1.1243. Its retracement zone at 1.1010 to 1.0955 is the primary downside target.

Daily EUR/USD Short-Term
Daily EUR/USD Short-Term

Based on Friday’s close at 1.1155, the direction of the market is likely to be determined by trader reaction to the main Fibonacci level at 1.1129.

Holding above 1.1129 will indicate the presence of buyers. The first upside target is Friday’s mid-point at 1.1176. This is followed by the reversal top at 1.1243. Taking out this price will negate the reversal and could trigger an acceleration into the next downtrending angle at 1.1294.

The EUR/USD could surge over 1.1294 with the next target another downtrending angle at 1.1394. This is the last potential resistance angle before the 1.1494 main top.

A sustained move under 1.1129 will indicate the presence of sellers. The next target is Friday’s low at 1.1108. Taking out this price will confirm the closing price reversal top.

The next target under 1.1108 is a long-term downtrending angle at 1.1094. Crossing to the weak side of this angle will put the market in a bearish position. This could trigger the start of a steep sell-off into a support cluster at 1.1017.

Watch the price action and read the order flow at 1.1129 today. Trader reaction to this level will likely set the tone of the market the rest of the session.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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