EUR/USD Mid-Session Analysis for September 5, 2012 After breaking an uptrending Gann angle and potential support point at 1.2535, the EUR/USD reversed to the upside after it was reported that the European Central Bank may have a plan in place to by distressed loans. Traders like this idea because it may mean the debt will be sterilized from the system, thereby not have an affect on the money supply. The news sent the Euro soaring against the U.S. Dollar, re-establishing support at 1.2535 and sending the currency pair into a major downtrending Gann angle at 1.2605. Although the rally had enough momentum to cross over the bullish side of this potential resistance price, the rally stopped short of breakout through the August 31 top at 1.2637. Daily EUR/USD Chart According to the swing chart, 1.2465 is still the main bottom. A trade through this level will turn the main trend to down. A move through the top at 1.2637 will reaffirm the uptrend and could trigger a move into former tops at 1.2692 and 1.2747. Because of the compression of the trading ranges, traders should look for expanded volatility. This is likely to occur on September 6 when the European Central Bank releases its next monetary policy statement. Additional expanded activity could also be expected on September 7, following the release of the U.S. Non- Farm Payrolls report.