Pair corrects higher and shows signs of more balanced market
The EURUSD trended lower last week. In the process, the pair reacted like a trending market.
The price stepped lower and had modest corrective moves. You can see that more clearly on the 5- minute chart.
I like to measure trend "legs" and measure corrections of those legs. If the price stays below the 38.2%-50% of the "legs" lower, the sellers remain in control and the trend is intact (the yellow areas in the chart above are the 38.2-50% of the trend legs lower).
Also, the 100/200 bar MA (blue and green lines) are in play as well on that chart. It takes a move back above those MAs (on a downward trend) to give the buyers some "love".
Stay below the MAs - or fail on a break above especially when the price cannot get above the 50% - keeps the sellers more in control.
Last week, the price did move above the 100/200 bar MAs but could not extend above the 50%. The sellers took back over when the price moved back below the MA lines on Friday.
Today, the price has corrected higher and in the process the pair has moved above the 100/200 bar MAs and the 50%.
SO the trend momentum has slowed. There is more of a balanced market.
Does it mean we are moving higher? Maybe. There is room for more upside probing especially if the now rising 100/200 bar MAs can hold support at 1.1881 and 1.1872 respectively (and moving higher). However, the market doesn't just forget what happened last week.
Looking at the hourly chart below, the 61.8% of the move up from the March 31 low cuts across at 1.19183. That would be an upside target that would give the dip buyers "more love". In addition, the 1.19255 level (near swing highs and swing lows from Thursday and Friday), would be a another upside hurdle for the buyers. Get above those levels, and the correction could see more upside probing.
Conversely, move back below the rising 100/200 bar MAs on the 5-minute chart, and the buyers don't feel that much love. The bias tilts back in the favor of the sellers.
