The EURUSD retraced 50% of the move higher in October as worries about Spain struggles (Eurogroup leaders are meeting in Brussels today) and German Industrial Production limped along with a -0.5% MoM decline. The German Trade Balance was good, however, with Exports and Imports up 2.4% and +0.3% respectively and the overall trade surplus coming in at 16.3B vs 15.2B expectations.
From a technical perspective, the price fell below steadily throughout the day. The decline took the price below the 38.2% of the move up from October, 100 hour MA (blue line) but stalled at the 50% of the October move (at 1.29364 – low reached 1.29366 . See hourly chart above)). Nice hold at the 50% level.
Looking at the 5 minute chart, the price also bottomed at a nice support level (channel trend line). So there was too nice reasons to hold support on two separate charts (hourly and the 5 minute).
The price rebound off the low now looks toward the 38.2% of the days range and the 100 bar MA on the 5 minute chart (see below at 1.2970 area). The price has been below the 100 bar MA since late on Friday. This is a key target to get above today to keep the buyers/correction phase in tact. 1.29805 and the 200 bar MA at the 1.2990 area (green line on the 5 minute chart) are the next targets. Providing the close support is the 1.2960 level which is the 100 hour MA (blue line in the hourly chart). WIth NY on semi holiday with banks closed but the stock market open, the market participants may simply use that MA as the bullish/bearish line today. Stay above bullish. Move below bearish.
