EUR/USD Mid-Session Technical Analysis for May 15, 2014

Daily EUR/USD Technical Analysis

The EUR/USD is trading lower at the mid-session.

Earlier in the session, the Forex pair broke through the lower or Fibonacci level of a major retracement zone at 1.3673. The move reaffirmed the downtrend, but sellers were only able to break the market into an uptrending angle at 1.3841 before profit-takers and bottom-pickers came in to take advantage of the low price. The actual low was 1.3648.

Crossing back over to the bullish side of the uptrending Gann angle at 1.3841 helped generate additional short-covering, sending the market back above the 61.8% level at 1.3673. These two prices are once again support levels.

The market began the session on the bullish side of a steep downtrending angle from the 1.3993 top, moving down at a pace of .008 per day at 1.3593. This is the first sign that downside momentum may be slowing.

If support can hold at 1.3673 then look for a drive into the upper or 50% level at 1.3734 or in the best case scenario, the next downtrending angle at 1.3793.

The tone of the market into the close will be determined by how traders react to the Fibonacci level at 1.3673. If it holds then look for a possible drive into the 50% level at 1.3734. If it fails then look for a retest of the angle at 1.3841 or lower.

Because of the prolonged move down in terms of price and time, the EUR/USD may be ripe for a closing price reversal bottom. This chart pattern will form after a close above 1.3713.

Hourly EUR/USD Technical Analysis

 

The main trend is down on the hourly chart. The main trend will turn up when the main top at 1.3730 is taken out with conviction.

The short-term range is 1.3730 to 1.3648. The retracement zone formed by this range is 1.3689 to 1.3699. The EUR/USD is currently trading on the bullish side of this range, helping to increase the upside momentum. 1.3699 and 1.3689 are now new support levels.

The main range is 1.3771 to 1.3648. The retracement zone of this range is 1.3709 to 1.3724. This zone is the next likely upside target. Since the main trend is down, sellers may step in on the first test of this zone.

Uptrending Gann angle support comes in at 1.3688, 1.3668 and 1.3658 this hour. The best downtrending angle is currently being tested at 1.3702 this hour. Taking out this angle with conviction could trigger a further rally into another angle at 1.3737 once the main retracement zone is overcome.

The tone of the market into the close should be determined by how investors react to a test of the main retracement zone at 1.3709 to 1.3724. Traders should also watch the retest of 1.3699 to 1.3689. A sustained move through 1.3689 could lead to a correction of the first leg up from the 1.3648 bottom.