The EURUSD has enjoyed a trend move to the downside in the NY session today, and that trend accelerated on the breaking of the bottom trend line at the 1.2593 level. That acceleration, moved the price to a low of 1.2544. Not surprisingly (range for the move was a healthy 142 pips) the pair has found some profit taking buyers, and we are currently seeing a move back toward resistance at the underside of the broken trendline.
A move above the trend line would likely be a signal that further correction is possible. The upside targets would be:
- 1.2598. The 38.2% of the days range
- 1.26136. The 50% of the days range. This was also the low in the London morning session.
- The 100 bar MA off the 5 minute chart would also be target corrective level. This is currently at the 1.2602 level.
The fall below the old low for 2012 at 1.2623 today should keep the bears in control. As a result, corrections toward resistance levels are expected to find sellers. Nevertheless, in this news headline environment we are in, risk should be defined in case a surprise occurs
A move back above the 1.2623 would be a level I would expect not to be breached. If so, there may be something not expected that is forcing the shorts to reconsider.