The EURUSD is down testing the 1.2394-97 area. This has been a low floor “bounce point” on a number occasions. It has also been a resistance level when the price did break lower (see green circles). The “remembered area” is a risk defining level and so far, the low has held.

EURUSD playing the range so far today.

EURUSD playing the range so far today.

This low is also the bottom of what I have defined the “Red Box” in my posts on the EURUSD for the last few weeks.

The Red Box was the inner range in November. The outer range has been defined by the Blue Box. In December, the market broke outside the boxes (to the downside) on two separate moves – each saw the price rebound albeit after pretty good moves lower.

On Tuesday this week, the price of the EURUSD moved back into the Blue Box (see chart above) and yesterday, the lows held above the lower extreme (see the aqua circles 6 and 7).

Where did the price go from there?

Today, the high extended up to 1.2494 – just short of the 1.2499-1.2508 area that defines the upper Red Box extreme. So the market is respecting the outer levels so far today.

What now?

The 50% of the Nov/Dec range comes in at 1.24229. If the 1.2393 level can hold, look for sellers to line up against this area on a test. I am biased to the downside fundamentally. The correction high was a nice level to sell against. If the sellers are to keep control – even if it is just a move back toward the 1.2357-59 area again – I would expect that this level should find the sellers today. Traders market, until a break outside the boxes.