The EURUSD has rotated to new lows as NY enters, extending the weeks narrow range in the process (145 pips as I write). The most narrow week range for the year is 159 pips so there is still room to roam. The price has broken below the 200 hour MA in the process (green line in the hourly chart above). That level comes in at the 1.23156 level currently. The 38.2% of the move up from the August low comes in at 1.23242. Stay below these levels this morning and this trend can continue lower today. I would expect a more neutral market on a move back above this area.
Looking at the 5 minute chart, the trend down from the high in London has totaled about 86 pips. The narrowish range also suggests the pair has room for an extension further down today. Corrections have been modest so far. The 38.2-50% of the last leg down comes in at the 1.2316-217 currently. This adds to the resistance from the hourly. Stay below 1.2325 on corrections and the shorts are still in control.
The pair has that bearish trend feeling and is showing characteristics of a trend. However, be mindful that trends need the support from the sellers who are overwhelming the buyers and the buyers who are forced to cover as the market fails to bounce enough. The 1.2315-25 area should be a ceiling if the sellers continue to control the market. A move above, and the water gets a little muddy for the trend like move ( move toward 1.2340). So far, the trend remains your friend – even if it ends up being only for a day.
