The defined trading range stalls the rally
In an earlier post, I spoke to defining the range given the risk from headlines from coronavirus and things like fear.
I wrote for the EURUSD:
Needless to say, the coronavirus is taking a backseat in trading today, but it is hard to anticipate how the winds of change will impact the future.
As a result, defining levels technically - like the 100 day moving average above and the 200 and 100 hour moving averages below - can help to define potential trading ranges and the trading bias.
The recent move down to test the support found buyers. While the previous 4 so hours found the sellers below the 100 day MA. Make sense to use levels to help trading but understand the winds of change can be from headline to headline. It also is dependent upon the fear of the market. Right now, the fear is not so great.
The price was trading near the 200 hour MA at the time (near yellow area and the green line in the chart above at 1.10395).
The market did use the support against the 100/200 hour MA and moved higher. The high price moved up and tested the 100 day MA (the upper part of the range). It has found sellers against the area. We currently trade at 1.1059 and respecting the ranges so far.
At some point there will be the shove outside the range (above the 100 day MA) or below the 200/100 hour MA, but for now the dip buyers are feeling better. The sellers near the 100 day MA are hoping for more downside from here....
