The EURUSD on Thursday and Friday of last week broke below a "Red Box" that confined the pair between 1.0633 and 1.0786. The high price from Friday tested the lower swing area of that box up to 1.0641 and found sellers against that area. Sellers were rewarded after the stronger than expected CPI sent the price down even further.
The move lower entered a another swing area going back to the end of April (lower red box). That swing area comes between 1.0457 and 1.0641. The low price today moved below the lower end of that target area, but is having some reluctance in moving much lower. A break below 1.04578 with momentum would send the price into the lower extreme which saw the pair moved down to its low for the year on May 13 at 1.03485. That low was the lowest level since the end of 2016/beginning of 2017. The low price reached 1.0339.
What would give the buyers some comfort?.
Moving and staying above 1.04709 followed by 1.04882 at 1.04904 are old swing lows going back to end of April early May. Absent those types of bounces, and the sellers are in firm control.
On the downside, the 1.04189 level followed by 1.0388 are lower target levels ahead of the swing lows from May 12 and 13th between 1.03485 and 1.03530.
