EUR/USD Mid-Session Technical Analysis for October 9, 2014

Daily EUR/USD Technical Analysis

The EUR/USD is trading lower at the mid-session after an early session rally failed, following negative comments from European Central Bank President Mario Draghi.

The main range is 1.2994 to 1.2500. Its retracement zone is 1.2747 to 1.2805. Today’s rally stopped inside that zone at 1.2791, shortly below the Fibonacci level. The selling was strong enough to drive the market through the lower or 50% level, putting it in a weak position.

The short-term range is 1.2500 to 1.2791. Its pivot at 1.2646 is the next likely downside target. This price is controlling the short-term direction of the market. A successful test of this level will be a sign that buyers are defending the Euro. Taking it out with conviction will indicate that sellers have regained control.

On the upside, the best resistance angle drops in at 1.2654.

On the downside, the first support angle comes in at 1.2660.

A failure at the pivot will likely lead to a test of the next uptrending angle at 1.2580, followed by 1.2540.

The tone of the market into the close will be determined by how investors react to a test of 1.2646.

Hourly EUR/USD Technical Analysis

The EUR/USD’s main trend on the hourly chart turned down when the Forex pair crossed the swing bottom at 1.2730.

The new main range is 1.2500 to 1.2791, making its retracement zone at 1.2646 to 1.2611 the next major downside target.

Today’s sharp sell-off has put the EUR/USD in a position to challenge the major uptrend line at 1.2679 this hour. Taking out this trendline will put the market in a weak position and could trigger an acceleration into the 50% level at 1.2646.