Earlier fall below the 100 hour MA got the ball rolling.
On Friday the EURUSD rallied above the 100 hour MA (blue line in the chart below) and went up to test the KEY area that formed the swing lows from August 25 to the break lower on September 26th. That test found sellers. The price rotated lower into the close and settled between the resistance above at 1.1822-37 (yellow area) and the 100 hour MA below at 1.1786. The close was 1.1810.
Today, the pair opened lower - in fact a few pips below the 100 hour MA at 1.1786 (opened at 1.1782). The price moved higher and approached the Friday close at 1.1810 (high reached 1.1807). The next move below the 100 hour MA turned the buyers into sellers. The price moved lower. The price moved toward a key support area. That comes in at:
- 38.2% retracement of the move up from the June low at 1.1720
- The low from last week's trading at 1.1716
- The swing high from August 2015 at 1.1711
- The 200 week MA at 1.1709.
The low today reached 1.1729. It wasn't in the cluster of support between 1.1709 and 1.1720, but buyers may have been "early leaners" given all the technical levels. The price is back up to the 1.1750-60 area (the high correction reached 1.1762).
What next?
The train left the station for shorts on the break of the 100 hour MA. Looking at the 5-minute chart below, the price fell below that level (the 2nd time today) and stayed below (bearish).
We know what is below at 1.1709/20.
The price has moved above the 100 bar MA on the 5-minute chart currently at 1.17489, but remains below the 200 bar MA at 1.17697 and the 100 hour MA which has moved down to 1.17734. That area - between the 1.1769 to 1.1773 is risk for shorts and will define the bullish or bearish bias today. Stay below is more bearish. Move above is more bullish (some of the shorts give up on the break).
