Checking off levels
The EURUSD has kept the trend move in play. The price has been checking off levels with little in the way of corrections.
- All the swing lows going back to January 27th. Starting at 1.1260 to 1.12790. This is now the line in the sand going forward
- The 1.2222 low from January 27th
- The 1.1209. This is the 61.8% of the move up from the 2000 low to the 2008 high.
Looking at the 5 minute chart, the pair has three legs down today (blue circles0 The corrections have been minimal.
The first leg was trigger with the break below the 100 hour MA at the 1.1346 area (see hourly chart above) and the lows from yesterday at the 1.1335 level. That got the ball rolling.
The next leg, after the 8:30 AM data took the price all the way down to the trend line on the hourly chart at the 1.1236 level The move took the price below the lows going back to January 27th (between 1.1260 to 1.1279. The correction off that low came right up to the 1.1260 area and stopped. Sellers leaned against the prior lows.
The third leg down has seen the price move to and through the 1.1222 level (low from January 27) and the 1.1209 (61.8% level outline above). The correction off the low has gone up to the 1.1224 level (just above the 1.2222 level. The low is currently trying to hold the 1.2209 level. The market may be tiring but the sellers remain in control.
The break today should be significant. The price has been confined in a narrow trading range. The market broke out of that range. The 1.1260-79 now is a key line in the sand. The price should have trouble on any correction toward that level. The lows for the year near the 1.1100 area should be targets. Can the trend continue today? It can but will need the price to continue to find sellers below 1.1230 (50% of the 3rd leg down). With a range of 180 pips so far today, the sledding is harder to extend, but going forward, the corrections should find sellers.
