Euro (€) / US Dollar ($) (EUR/USD) Mid-Session Update for December 18, 2012
The importance of Tuesday’s rally can best be seen on the EUR/USD weekly chart. Today’s move to 1.3240 has placed the Forex pair in a position to take out a long-term downtrending Gann angle at 1.3240 on the weekly chart and the week-ending May 2, 2012 top at 1.3283.
A move through both of these levels will represent a serious shift in investor sentiment and could trigger an acceleration to the upside. The next move is expected to be event driven since the current trading action is tied closely to the U.S. fiscal cliff issue.
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The daily chart shows that the EUR/USD is following a pair of uptrending Gann angles. The angles are at 1.3160 and 1.3156. As long as they hold as support, the market will continue to drive higher.
One of the first signs of weakness will be the penetration of these Gann angles. Additionally, since the Euro is in the midst of a prolonged move in terms of price and time, traders should watch for a closing price reversal top to signal the start of a short-term correction.