The EURUSD remains in a fairly narrow trading range today with a downward bias (at least in the NY session). The channel boundaries in the 5 minute chart below, are defining risk with the topside trend line holding resistance on four separate occasions. The last hold also corresponded with the 1.3029 low from early in the London morning session. This keeps the bears in charge and the bulls worried.
The hourly chart defines the next close target below at the 1.3005 level. This corresponds with the bottom trendline. A break would be needed to keep the technical sellers in charge.
Below that level, the daily chart shows target support against the low from February at the 1.2974 level and the 61.8% Fibo retracement at the 1.29523 level.
The move lower over the last few days started against the 100 day SMA (blue line in the daily chart above). The bias is bearish below this MA but continued momentum and bearishness from the hourly chart and moves through the key downside target levels on the daily chart are still needed. The market over the last few months has traded mostly between 1.2950 and 1.3330 (5 days saw the price above the 1.3330 area). That range is not all that impressive. As a result, a break will be eyed – but needed.
When markets trade in a narrow range, one must be aware of the “fall in like” nature (i.e., range bound) of the trading, versus the “fall in love” nature of a trend. To gather downside momentum and a chance for a test of the 2012 lows, a confimation move through the 1.2952-74 floor is needed. That should solicit more serious selling interest in the pair. Without it the market could be prone for reversals. So keep an eye to the downside on the longer term chart, but don’t ignore the clues from the shorter term charts either. Reversals are still a possibility.