Risk defining buyers leaning on the 1st test
The EURUSD moved to a new session low at 1.08155 as dollar buying is dominated in trading today.
That low stalled between the swing lows from last week at 1.08114 and 1.08162. Risk defining traders leaned against the levels and have pushed the price back higher in hopes the 3rd low in the area holds support, and a corrective move higher began.
I would suspect that if the low from last week at 1.0814 is broken, the dip buyers will turn to sellers and traders would start to think in terms of breaking 1.0800 and then making a run toward the April 3 and 6th lows at 1.0772 and 1.07676 respectively.
What is risk for shorts now?
The pair's move lower today was able to get below swing levels at 1.08404, 1.08347 and 1.08293 (see red horizontal lines in the chart above). Admittedly the price action around those levels was very choppy as the market fumbled with the idea of which way to go.
I would expect, nevertheless, that should the price move back above each of those levels - with 1.08404 as the most important - the buyers would feel more confident, and the sellers would look to cover some shorts. Stay below, however, and the sellers remain more in control.
We are currently trading above the 1.08293 level as buyers try to make a play off the lows. However the key 1.08404 level still looms above.
