EUR/USD Mid-Session Technical Analysis for October 1, 2014

Daily EUR/USD Technical Analysis

The EUR/USD is consolidating at the mid-session. Trading is light and volume is down ahead of Thursday’s European Central Bank announcement and President Draghi’s press conference. The recent price action suggests that investors have priced in the announcement of additional stimulus.

The next downside target is a monthly chart target at 1.2562. Taking could this figure could trigger an even further slide to 1.2302 over the near-term.

On the upside, the old bottom at 1.2660 becomes new resistance along with a long-term downtrending angle at 1.2672.

Hourly EUR/USD Technical Analysis

The main trend turned up on the hourly chart last hour when the top at 1.2634 was violated. A new higher bottom was created at 1.2583, followed by the main bottom at 1.2570.

The main range is 1.2702 to 1.2570. Its 50% level at 1.2635 stopped the rally last hour at 1.2639, triggering a sharp break from the high.

The new short-term range is 1.2583 to 1.2639. The selling pressure was strong enough to take out its retracement zone at 1.2611 to 1.2604. This zone is controlling the short-term direction of the market. Trader reaction to this zone will set the tone for the rest of the trading session.  

Look for a bullish tone to develop if traders can push the market back above the 50% level at 1.2611. The EUR/USD should weaken into the close on a sustained move under 1.2604 and especially if it breaks the swing bottom at 1.2583.