EUR/USD Mid-Session Analysis for November 5, 2012

The EUR/USD turned the main trend down on the daily chart on Friday with a trade through the last swing bottom at 1.2882. On Monday, the Euro confirmed the change in trend with a follow-through break. The new main top and change in trend level is 1.3020. Besides the near-term bottom, the market also took out previous bottoms at 1.2825 and 1.2803, solidifying the developing downtrend. 

From August 28 to mid-September, the EUR/USD rallied from 1.2465 to 1.3172. This range created a retracement zone at 1.2818 to 1.2735. The upper level of this zone provided support several times in the past, but has now failed, setting up a possible break into the Fibonacci price level at 1.2735. 

The EUR/USD is also testing a long-term Gann angle at 1.2782. This angle has provided direction and support since July 24. A clear break though this angle indicates further weakness is likely. Downtrending resistance comes in at 1.2879 today. 

With the market breaking a series of old bottoms and an uptrending Gann angle, longer-term downside objectives may come into play. From late July to mid-September the Euro rallied against the dollar from 1.2042 to 1.3172. This formed the next likely downside objective at 1.2607 to 1.2474.