Euro (€) / US Dollar ($) (EUR/USD) Mid-Session Update for December 13, 2012

The EUR/USD inched higher on Thursday after the European Union reached a deal that would create a single bank supervisor and EU banking union. Interest rates also fell in Spain and Italy on the news while Greece was approved to receive fresh bailout money. The move by the Euro barely penetrated Wednesday’s high which could be a sign it is nearing a top. 

Technically, the market is rapidly approaching the December 5 high at 1.3126. A failure at this price last week triggered a sharp sell-off into 1.2876. This week’s strong rebound rally following a test of a 50% level is a sign that traders may be more interested in buying dips. A failure today near 1.3100 will be a sign that the market may not be strong enough to warrant the buying of strength. 

Gann angle resistance at 1.3096 stopped the market on Thursday while an uptrending Gann angle at 1.3036 provided the support. A break though this angle will be a sign of weakness. Based on the current four-day rally from 1.2876 to 1.3099, a weak close today could trigger a break into a retracement zone at 1.2988 to 1.2961.