Monday and Friday lows are in a swing area that has stalled falls going back to early March.
The EURUSD is stretching the range in early NY trading and in the process, is stretching back toward swing low levels that stalled the fall both on Friday and Monday.
That broad-ish area comes in at 1.2251-72 (see yellow area in the chart above). Looking at the chart above, the lows from yesterday and Friday stalled in the area. The lows came in at 1.22597 and 1.22573 respectively. Prior swing lows going back to March 2 came in at 1.2251, 1.22685 and 1.22723.
Helping the downward bias - and potentially leading to a break lower - is that although the price has seen a recovery off the low area, the swing highs have been lower since the double tops near 1.2443-45. Also the run up yesterday -and into today - was able to get above both the 100 and 200 hour MAs - and tried to stay above that level. When it cracked back below today, the selling intensified. That is more bearish and may swing more traders into the negative direction. Is it good enough to lead to moving below the floor, time will tell.
There are reasons to buy the EUR. The ECB starting to unwind the stimulus and even raising rates again is one example. However, there are reasons to not favor the EUR (or favor the US dollar). The expected slow pace of inflation, fragile recovery, or US Fed outpacing the ECB. Those are just a smattering of reasons. We know there are other "stories" that can upset the apple cart including anything out of Washington at any time.
As a result, it makes sense for the market to consolidate/define ranges/respect technical levels but if they fail (like the break above the 100 and 200 hour MA did), lead to reversals.
So, if the price does dip to the "yellow area", don't be surprised to see the buyers sticking a toe in the water again, with stops on a break. Be aware.
Looking at the daily chart below, a trend line connecting lows from Dec 18 and March 1st cuts across at 1.2258 - near the lows from yesterday/Friday. That is another reason to expect buying. However on a break a longer trend line would be targeted at 1.2152.
