Short-Term Uptrend on EURUSD (Oct 20, 2014)

Price is making its way to the channel support near the 1.2750 minor psychological level, which might continue to hold as a floor.

Stochastic is moving out of the oversold area, with a shallow bullish divergence indicating a possible bounce. If that happens, EURUSD might make its way back to the top of the range near the 1.2900 major psychological level. MACD is also reflecting a potential return in buying pressure.

In addition, the SMAs are in line with the channel bottom, reinforcing the potential support. If this is broken though, it could be a sign that EURUSD is in for a downtrend and may be due to test the previous lows at the 1.2500 levels.

Going long at 1.2750 with a tight stop and a target of 1.2900 could work for a technical trade. If you’re bearish on this pair, you could wait for a downside break of 1.2700 and aim for the lows near the 1.2500 area.

Kate Curtis from Trader's Way