Euro (€) / US Dollar ($) (EUR/USD) Mid-Session Update for December 19, 2012
The EUR/USD continued its breakout rally on Wednesday through the May 2012 top at 1.3283. Traders had their sights set on the March 12 top at 1.3385, before selling pressure hit the market shortly before the mid-session.
Earlier in the session, the Forex pair showed its strength by muscling through a major downtrending Gann angle at 1.3240 on the weekly chart. Although it was able to reach 1.3310, the breakout rally was not as strong as anticipated, and at the mid-session, it was testing the validity of the breakout. A close under this angle will be a sign of emerging selling pressure.
Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Product Disclosure Statement (PDS) can be obtained either from this website or on request from our offices and should be considered before entering into a transaction with us. Raw Spread accounts offer spreads from 0.0 pips with a commission charge of USD $3.50 per 100k traded. Standard account offer spreads from 1 pips with no additional commission charges. Spreads on CFD indices start at 0.4 points. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
The support on the daily chart is clearly defined by a pair of uptrending Gann angles at 1.3196 and 1.3180. Since these two angles are controlling the strength and direction of the market, a break under them will signal a short-term top and the possibility of a correction.
Another sign of a top today will be a lower close. Since the EUR/USD has already posted a higher high, a lower close will signal the formation of a closing price reversal top. This will be a sign of serious profit-taking and selling pressure. This pattern often leads to the start of a 2 to 3 day correction.
Typically, the closing price reversal occurs following a 7 to 10 rally. Today is the eighth day of the rally from the bottom at 1.2876 which makes the Euro ripe for a short-term top.