The EURUSD has moved to the next key support zone at the 1.3000-16 area. There should be some traders looking to take some profit here, or looking for a quick reversal trade as risk can be defined and limited.
EURUSD tests key support area at 1.3000-16 area
Looking at the 5 minute chart below, the trend move lower has been sharp with little in the way of corrections. ON a trend move that is fast, directional and larger than normal trading range, applying a fibonacci retracement to the move sets up the “Correction Zone” defined by the 38.2%-50% of the move lower. Basically, if the sellers love selling they should love selling again on a correction near this area. Conversely, the price should not go above this level if the sellers are to remain in control. Just another way to define risk in the market. We know the price moved away from the 1.3104. We know the low target at 1.3000-16 has been tested. Now the progression says, “stay below the Correction Zone” to keep the sellers in charge.
The “Correction Zone” defined by the 38.2-50% of the trend move lower will now be eyed as risk defining level for the EURUSD