EUR/USD Mid-Session Technical Analysis for January 6, 2015

Daily EUR/USD Technical Analysis

Uncertainties over the developing situation in Greece continued to pressure the EUR/USD on Tuesday at the mid-session. The key concern is the nation’s possible exit from the Euro Zone. These worries are likely to persist until the early election later this month on January 25.

The market had a nice technical bounce from 1.1874, but today’s inability to follow-through to the upside is a clear indication that sellers are still in control.

The first level of support today is the June 7, 2010 bottom at 1.1876, followed closely by yesterday’s low a 1.1874. The daily chart begins to open up under this level with various support points coming in at:

March 10, 2006 at 1.1858

February 27, 2006 at 1.1825

December 30, 2005 at 1.1778

December 2, 2005 at 1.1661

November 15, 2005 at 1.1638

The last bottom is also a main bottom on the monthly chart.

The tone the rest of the session will be determined by whether traders will continue to defend yesterday’s low at 1.1874.

If there is a short-covering rally then it will likely be related to position-squaring ahead of Friday’s U.S. Non-Farm Payrolls report and oversold conditions.

Hourly EUR/USD Technical Analysis

The main trend is down on the hourly chart. It turned up briefly late Monday, but the rally stalled at 1.1968. The trend turned back down on the move under the swing bottom at 1.1926.

The new short-term range is 1.1968 to 1.1883. The retracement zone formed by this range is 1.1926 to 1.1936. Since the trend is down, sellers are likely to come in if this zone is tested. Trader reaction to this zone will likely set the tone into the close.

A sustained move over 1.1936 will set up a possible late session drive into 1.1968. A sustained move under 1.1926 will likely mean a test of 1.1883 or perhaps even 1.1874 into the close.