Went down to support and held. Are the sellers ready to sell against the 100 hour MA now
The support target against the 200 hour MA and the trend line found buyers and now we are up testing the 100 hour MA at the 1.2487 level. Will we find the sellers or do the technical waters get muddy on a break back above.
Looking at the 5 minute chart, the yellow area shows the upside targets now. The 100 hour MA is at 1.24871. The 100 bar MA on the 4-hour chart is at 1.2495. The 200 bar MA on the 5-minute is at 1.25177. Down below you can see how the buyers leaned against the 200 hour MA. Those buyers were going against the flow of the bias until that point, but they knew risk was defined and limited. If it went much below, they probably would have exited with a small loss.
Now that we are looking to stay above the 100 hour MA, the bias is a little less certain. We could see sellers line up right here - against the levels and also the 1.2500 level. Or we break and go higher - getting above the 1.2517 changes the picture even more.
One thing helping the dollar selling swing, is that bond yields in the US have started to come back down a little. The 10 year is trading at 2.192% down from a high of 2.300%. Traders start to wonder if the back up in yields is enough.
Jeffrey Gundlach last Friday said that he did not expect the 10 year to go above 2.35%. The yield went to 2.30% today. Is that close enough for now?
Traders are now trading with 1.2500-17 above and that 200 hour MA below at 1.2448 an even more important level to eye.