EUR/USD Mid-Session Technical Analysis for October 8, 2014

Daily EUR/USD Technical Analysis

The EUR/USD took out yesterday’s high earlier in the session, but pulled back to lower for the day. The higher-high makes 1.2500 a new higher bottom.

The main range is 1.2994 to 1.2500. The retracement zone is the next major upside target at 1.2747 to 1.2805.

Today, the market is straddling a downtrending angle from the 1.2994 top at 1.2674. Early indications are that trader reaction to this angle will likely set the tone for the day. Sustaining a move over this angle should trigger a move into the retracement zone target.

On the downside, the key support angle is at 1.2620. Buyers came in slightly ahead of this angle at 1.2622 earlier today. A failure at this angle could trigger a break into other potential angles at 1.2560 and 1.2530.

If the new short-term range becomes 1.2500 to 1.2684 then look for a test of its pivot at 1.2592. This pivot could control the direction of the market throughout the day if there is a sell-off from current levels.

Hourly EUR/USD Technical Analysis

The main trend is up on the hourly chart. The EUR/USD is posting higher-tops and higher-bottoms, but running into resistance as it nears a key retracement zone.

The main range is 1.2900 to 1.2500. The retracement zone at 1.2700 to 1.2747 is the next major upside target. How traders react to this zone could determine the tone for the rest of the week. A breakout over 1.2747 could set a bullish tone while a failure at 1.2700 could lead to another break.

If a short-term range forms between 1.2500 and 1.2684 then watch for a pullback into 1.2592 to 1.2570.

A trade through the swing bottom at 1.2622 will turn the main trend to down on the hourly chart.

If there isn’t any news later today to move the EUR/USD then look for sellers to come in near 1.2700 and buyers near 1.2592. In other words, the market will be range bound.