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The surprise interest rate cut last night was welcomed by traders with selling down to trend line support. The trend line connecting the lows from September 20 and September 26th comes in at 1.0289 and that is where the price bottomed today.
The correction off the low has retraced above the 100 bar MA ( blue line in the chart below) on the 5 minute chart but has found resistance against the 38.2% of the days range. This keeps the bears in charge. A move below the 1.3004 will get the price back below the 100 bar MA and bear flag trend line and should lead to another check of the lows (and trend line on the hourly).
On the topside, the move lower today did take the price below the 200 day MA today. That level comes in at 1.0343. If this move lower is for real and supported by the “market”, I would not like to see the price trade above this MA in the near term. The next key target on the downside will be the 100 day MA (blue line in the chart below). That level comes in at the 1.0231 level today. The 38.2% of the move up from the June low is not far behind at 1.0224.
