Stalling near the 200 hour MA
Yesterday, I spoke to the convergence of the 200 and 100 hour MA (see prior post). The two MAs have converged (even crossed) for the 1st time since the election. It is a time for a move - up or down.
The price broken lower, first below the 200 hour MA (green line) and then the 100 hour MA (blue line). The momentum took the price down to 20.2744 at the low (the 100 hour MA is at 20.40175). That took out the low from Friday at 20.3000 area too. That should be bearish.
Although bearish, that fall could not be sustained, and the price has moved back above the 100 hour MA and even briefly back above the 200 hour MA at 20.49407 (we currently trade below at 20.4875).
So what now?
Like yesterday, the story still remains the same for this pair. Get above the MAs and that is bullish. Move below and it is bearish.
Now, those breaks may fail. How do you deal with the failures? You need to map out your targets like the Friday low - and see what happens at those targets. For example, if the 20.3000 level is important, you need to see momentum to and through that level. If you don't see it - especially on a pair like this which is likely to remain more bid into the Trump presidency - you have to be cautious.
What we learned on the break lower overnight was that the sellers had the shot to go lower, BUT they could not keep the momentum going. The price could not stay below the 100 hour MA, it could not stay below the Friday low. It could not get to and through the 38.2% retracement at 20.13979. Those were the targets and those targets failed.
We also learned that the buyers COULD take the price back above the 100 hour MA at 20.40167. So the buyers are still in control. Risk is now the 100 hour MA.
What are the targets above now?
- Get and stay above the 200 hour MA at 20.49406
- Get and stay above the topside trend line at 20.5495
- From there, the 38.2% at 20.5996 ,
- The old highs at 20.6539 and 20.7421
- The 50% at 50.74721