EUR/USD Mid-Session Technical Analysis for October 22, 2014

Daily EUR/USD Technical Analysis

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

Downside momentum appears to be building because of several reasons. Firstly, the market is trading on the bearish side of an uptrending angle at 1.2760. Secondly, the Forex pair is trading on the weak side of a downtrending angle at 1.2734. Thirdly, the EUR/USD is trading below the 1.2500 to 1.2886 pivot at 1.2693.

The pivot at 1.2693 is controlling the short-term direction of the market. If it fails to hold today then look for a sustained move into the next uptrending angle at 1.2630. Because of the importance of the pivot, the market may straddle this level several times before traders pick a direction.

The tone of the market the rest of the session will be determined by trader reaction to 1.2693.

Hourly EUR/USD Technical Analysis

Earlier in the session, the EUR/USD changed the main trend to up when it crossed the former top at 1.2730. Although there was a follow-through move to 1.2739, buyers failed to support the move and the main trend turned back to down on a trade through 1.2720.

There was a further acceleration to the downside after yesterday’s low at 1.2706 was taken out as well as the low from October 16 at 1.2705. The selling pressure stopped at 1.2680, but there was no signal that the low of the day had been reached.

This hour, the downtrending angle that is controlling the market is at 1.2717. Look for a downside bias as long as the market stays under this trend line.

The hourly chart indicates there is plenty of room to the downside if sellers continue to hit the market with conviction. The next two targets are 1.2637 and 1.2624. Based on the current set-up, the main trend will turn up when 1.2739 is taken out.