The EURUSD has gotten a boost from headlines that there was a ceasefire in Ukraine. In other fundamental news EU Retail Sales fell by -0.4% for the month. Markit PMI data was down from the previous month and lower than estimates. European stocks are higher.
EURUSD hourly chart shows buying with next resistance being tested.
The ceasefire idea seems to be the focus, and the technicals have also improved ever so slightly.
Looking at the hourly chart above, the EURUSD has been able to extend above trend lines and the 100 hour MA (blue line in the chart above currently at the 1.31448 level). The price is currently testing lows from last Thursday/Friday at 1.31585 (see blue 1 and 2 circles). A move above this level is needed to keep the buyers happy with the 200 hour MA (green line in the chart above) being another target (currently at 1.3173. The price of the EURUSD has not been above the 200 hour MA since August 18th. If the momentum is able to continue today, that level should be a tough level to get through on the first look – especially with ECB and Draghi to come tomorrow.
On the downside, the move above the 100 hour MA is the third look over that MA in the last 5 days of trading. Last week, the first push above the key MA, was the one that filled the Friday low gap up to the 1.3219 area (see yellow area in the chart). The second look on Friday, was more in reaction to not being able to break Thursday’s low. The move to the topside trend line made the most sense in a pre-holiday trade.
You get the feeling that the move higher today is more of a “just because we can’t go lower” move as well. If Ukraine headlines are the catalyst, that is on pretty shaky grounds. Although buyers – at least intraday are winning the battle today – that can shift on a move back below the 100 hour MA. So use the 100 hour MA as a support level. Stay above bulls winning. Move below, and I would be skeptical about much more momentum higher.
Looking at the daily chart below, the price yesterday got ever so close to the low target from the September 2013 low at 1.3104 area (the low came in at 1.3109). So it too gave traders cause for pause in what has been a pretty good move lower over the last few months.
EURUSD found buyers against the low from September.
The 1.30168 level is another key target below (50% of the move up from the 2012 low). I favor a move toward that level overall and then a longer pause but holding the 1.3104 level yesterday is the markets way of saying “Let’s see what Draghi has to say tomorrow”.
Overall, a little more bullish today but watching to see if support below can hold.
