Old trend line stalled the fall
Calling it like it is, the EURUSD is trading in the middle of a 26 pip trading range. The price action has been up and down and up again. Thee ir not a whole lot going on at these levels. Yesterday, trade action was just as bad with a 27 pip range. That's hard to make a buck.
However, non-trending transitions trending at some point. Do we go higher or lower?
From the hourly chart above, the trend is recently to the downside. the price reach the high on June 25 at 1.14115 and today reached a low at 1.11927. The price has been below its 100 hour moving average since June 28 (blue line in the chart above). That MA is up at 1.2465. We are below a trend line at 1.1223. All is bearish.
What may give dip buyers some hope is:
- The price low today stalled at an old trend line. That trend line was defined by swing lows on June 25, July 1 and July 2. On Friday ( employment day) the price fell below the trend line, but stalled ahead of the 1.1200 level and rebounded back above that line. Today, the old, original line stalled the fall again (see green numbered circle 4).
- The price is above the 1.1200-065 area. The 1.1206 was the low on Friday and again near the low yesterday. The 1.1200 is a natural support level. The 1.1202 was near swing lows from mid-June (see red circles).
So if you like to buy dips. If you think the sellers had their shot to go lower today. Then staying above 1.12000 is the play/trade.
If it holds, the topside trend line and the falling 100 hour MA become targets on the topside at 1.1222 and 1.12465 respectively(and moving lower). Above that, the key 100 day MA comes in at 1.12558. Risk is a move below 1.12000.
The trend is down, but the market is non-trending and sellers had their shot today. Does it lead to a run higher? That is hard pressed, but if support holds, we could see a little correction ahead of Powell. Its just a trade though....
