Can't get below the 1.0700 after yesterdays run up after the FOMC tightening
Yesterday we get a Fed tightening, and the EURUSD soars. Of course the tightening was all priced in/Yellen and the Fed were not so hawkish (even though they will likely hike 2 other times in 2017 which is more than any other CB). Or at least that is the story for the rise.
Today, we see the price dip to 1.0705 - getting below the close support at 1.0713 - but are NOT able to get below the 1.0700 level (a natural support level AND the 61.8% of the move down from the Feb high - see 4-hour chart below). Buyers remain in control if they cannot break these levels.
The price high was came in at 1.0746 in the Asian session. The subsequent highs have been lower at 1.0740 (in the London morning session) and we just extended up to a NY high of 1.0733.
By the way, US housing starts were better as was the Philly Fed. The initial claims are continuing to show steady employment gains. The Building permits were lower. Even though there are reasons for the dollar to go higher, the dollar is keeping the soft touch. We have to listen to the market.
The pair is getting dragged up by the GBPUSDs surge higher perhaps. That pair is making new highs up to 1.2371 (is is back down a bit to 1.2355 now).
Technically for the EURUSD, the buyers are in control above 1.0713. If the buyers are in control, the price can go higher. The sellers have to take come control back and that is a level to get and stay below. Of course, the 1.0700 is not going away either, but get below 1.0713 and there is a chink in the armor.
Any other clues?
Looking at the 5 minute chart, the price is up and down in a narrow range. The price has been trading above and below the 100 and 200 bar MAs on that chart (blue and green lines in the chart below at 1.0723-26. We are trading right at that level now. If the price is going below the 1.0713 level (maybe), the price needs to get below those MAs and stay below. Note that on the last break below the 2 moving averages, the buyers came in at 1.0713 (that number again).
The upside?
Well get above the highs and the price goes higher with 1.0764-74 as the next target followed by 1.0797 and the high at 1.0823.
Overall, the price is not exactly continuing the race to the upside but it is also not moving lower. The sellers have to prove that they can take back some control after yesterday's run higher. So far, they tried once but could only get below the first target level (at 1.0713) but not the second target level (at 1.0700). That is not proving to me they can take control. We will see....