Yesterday, the 100 hour MA stalled the fall
The 100 hour MA was busted in the London morning session. Recall (or see in the chart below), that MA stalled the falls yesterday twice, and the price bounced (blue line in the chart below). What was support is now resistance (risk level for shorts now). Stay below, bearish. Move above and all bets are off.
The break today, led to sellers (the upside momentum was limited). The price has moved lower and looks to test other support targets lined up below including:
- Trend line support at 1.17338
- A swing area from Sept 14, Sept 18, and Sept 24 (see red circled numbers) at 1.1721-239
- 200 hour MA at 1.1716 (green line)
- 38.2% of move up from September 10 low at 1.1704
You kinda expect traders to lean against the levels on tests.
Overall, ahead of the Fed, it makes sense to back off from what was the highest high since June 14 reached on Monday (see daily below). The pair has been supported by more hawkish comments from Draghi recently. The high on Monday was above the 38.2% retracement at 1.17795, but fell short of the June swing high at 1.8499.
On a move higher after the Fed, those hurdles will need to be broken if the pair is to make a bigger push toward the 50% retracement of the move down from the 2018 high at 1.19278 and the 200 day MA at 1.19246 (see chart below).
PS if the lower levels on the hourly chart are to be taken out on the Fed action today(or other reason for a kick lower), the 100 day MA at 1.16568 will be eyed by the bears. That level should find support buyers against it though.
