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EUR/USD Mid-Session Analysis for December 4, 2012

By:
James Hyerczyk
Updated: Aug 20, 2015, 23:00 UTC

After a sideways trade, the EUR/USD surged, taking out the previous high on the 60-minute chart at 1.3075. The move stalled at 1.3106, falling short of

Hourly EUR/USD Chart

After a sideways trade, the EUR/USD surged, taking out the previous high on the 60-minute chart at 1.3075. The move stalled at 1.3106, falling short of the October top at 1.3139. The rally also took out weekly Gann angle resistance at 1.3087. 

The daily chart shows a rather steep rally which is often indicative of an overbought market or a market nearing a top. This morning, the EUR/USD broke another nearly flat downtrending Gann angle at 1.3054. The move took out weak short sellers, giving the Forex pair enough upside momentum to challenge the next Gann angle at 1.3090. 

With uptrending support way down at 1.2960, the Euro is vulnerable to a near-term correction. This will likely coincide with a topping signal such as a closing price reversal top. The first indication of a top often begins on the intraday charts. 

Hourly EUR/USD Chart
Hourly EUR/USD Chart

Since the EUR/USD is susceptible to a near-term top, it is important to shift the focus to the 60-minute chart. The main range on this chart is 1.3045 to 1.3106. This range has formed a retracement zone at 1.3075 to 1.3068. At the mid-session, the market is testing this zone. Since the main trend is up, buyers are likely to show up looking for a technical bounce. 

After reaching a top at 1.3106, the EUR/USD proceeded to correct to 1.3072. This price was slightly below the 50% level at 1.3075. If 1.3072 holds as support then traders should watch for a minimum retracement to 1.3089. If upside momentum continues to build then 1.3093 is anther potential upside target. 

If 1.3089 to 1.3093 is tested and sellers show up then traders should look for a break into the close. Continuing through this zone will likely mean the market will close on its high.

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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