EUR/USD Mid-Session Technical Analysis for January 7, 2014

Daily EUR/USD Technical Analysis

The EUR/USD continued its slide on Wednesday and is trading lower at the mid-session after a report showed Euro Zone consumer prices fell more than economists predicted.  The bad news increased chances for the implementation of a quantitative easing program by the European Central Bank.

Technically, the main trend is down on the daily chart. Sellers continue to chew through long-term support levels. As the market works its way lower, the old support levels become new resistance.

With the market currently trading at 1.1832, minor support is the February 2006 bottom at 1.1825. The next support is the December 30, 2005 bottom at 1.1661.

On the upside, resistance is 1.1858 and 1.1876.

With the market in a freefall, short sellers may start to get comfortable, but should still be watching for closing price reversal bottom or “W” bottom formations. This typically occur following prolonged moves in terms of price and time.

Hourly EUR/USD Technical Analysis

The main trend is down on the hourly chart. At the mid-session, the EUR/USD is straddling a former bottom at 1.1825. Buyers are trying to defend this area because the next support level target is down at 1.1778. This means another acceleration to the downside is a strong possibility today.

On the upside, the resistance comes in at 1.1858.

There could be an expansion to the upside if 1.1896 is taken out later in the day.

It looks as if 1.1825 is going to be the key pivot today on an intraday basis. Trader reaction to this number should set the tone into the close.