The EUR/USD is trading higher at the mid-session after failing to attract fresh selling pressure following a break through yesterday’s low at 1.3329. Despite the rally, the market is also having trouble attracting enough upside momentum to produce a valid test of yesterday’s high at 1.3385. The drop in volume and volatility is being attributed to position squaring ahead of tomorrow’s Fed report.
The key Gann angle to watch is at 1.3351. The Forex pair is straddling this angle at the mid-session, serving as further evidence that uncertainty and indecision are driving the market today. Regaining this angle on the upside could trigger a late session rally into 1.3385. Taking this price level out with conviction could fuel an even further rally into another downtrending Gann angle at 1.3401.
A sustained move under the angle could draw the attention of sellers since the daily chart indicates there is plenty of room to the downside. Based on the main range of 1.3104 to 1.3385, the next potential downside target is a retracement zone at 1.3244 to 1.3211. This zone is not likely to be tested today, but if the Fed decides to reduce stimulus more than expected tomorrow, the EUR/USD could break into this area.
The main trend is down on the hourly chart. This was confirmed when the early session rally to 1.3369 fell short of the recent top at 1.3385.
Based on the short-term range of 1.3385 to 1.3324, a major retracement zone has formed at 1.3355 to 1.3362. This zone could become new resistance the rest of the session. As long as 1.3369 holds, pressure should be on the downside.
A sustained break later in the session could drive the market toward the last main bottom at 1.3324. Further downside pressure could trigger an eventual move into the major retracement zone at 1.3319 to 1.3303. An uptrending Gann angle also comes in at 1.3319, making this price a valid support cluster.