We can use EACH OTHER or ONE ANOTHER when the action goes from A to B and from B to A at the same time (reciprocal)

They smiled at each other (= he smiled at her and she smiled at him)

Notice the difference between reflexive pronouns (themselves) and reciprocal pronouns (each other / one another)

Themselves								Each Other
A		B						A		B

- Paul and Susan are looking at themselves in the mirror = Paul looks at Paul's reflection & Susan looks at Susan's reflexion (reflexive)
- Paul and Susan are looking at each other = Paul looks at Susan & Susan looks at Paul (reciprocal)

- You can only love yourselves (you guys are selfish) 
- You love each other a lot (there is a lot of love between you)  

- They killed themselves (it was suicide)
- They killed each other (everybody was shooting everybody, it was murder)

EACH OTHER or ONE ANOTHER?

Traditionally, they used EACH OTHER when talking about two people and ONE ANOTHER when it is more than two people. But in modern English that difference is disappearing, so most people now use one expression or the other with the same meaning. EACH OTHER is the most common.

En español se utiliza la misma construcción para el reflexivo y para el recíproco, así que no te confundas!

Mientras yo hablaba por teléfono mis dos amigas se pintaban la cara  aquí no podemos saber si cada una se estaba pintando su cara mirándose al espejo o si una le pintaba a la otra y viceversa, porque ambas ideas se expresan igual. Por eso si en español la situación es ambigua y queremos dejar claro que es recíproco y no reflexivo, solemos añadir la expresión "la una a la otra" o "entre sí".