The EURUSD has been contained today in a narrow 29 pip low to high trading range today. The move lower has seen traders leaning against the low from September 2013 at the 1.3104 (low today has reached 1.31095). This level needs to be broken (and find momentum) for the bears to remain in control.
Having said that, the buyers today are not lighting the world on fire. Looking at the hourly chart below, the price had a look above the Asian session high in early London trading, but that push higher could not be sustained (high reached 1.31358). Above is a bunch of resistance levels which keep the sellers in control and the buyers nervous. Included is the twice broken trend line at 1.3142 (had a failed break and then a sustained break lower). Above that, the 1.31516-646 have a bunch of resistance points including the 38.2-50%, lows from last week, the 100 hour MA (blue line), downward sloping trend line.
Is there a reason to buy? Eh, yes, the 103104 level is a risk defining level and traders who stuck their toe in the water are feeling ok – not great, but there is not much pain or anxiety (risk is limited). However, a break below that level (at 1.3104) should not be ignored. The pair has been trending lower and although momentum has slowed, the price remains below things like the 100 hour MA (blue line below) and all those other levels just above. The burden of proof is still on the buyers to prove they can take back more control.
One caveat to consider is the range for the day is still quite narrow. So there is room to roam higher and lower if there is a break outside the range.
ISM risk ahead.
