The EURUSD has been stepping down with little in the way of corrections over the last few hours. It has sliced below technical support levels in the process including:
- Trendline support and the 200 hour MA (green line) at the 1.3130-33 area
- After pausing briefly at the 100 hour MA (blue line) and 50% of the weeks trading range at the 1.3122 area, it fell below those imporant levels and
- The last plunge has seen the low from yesterday and the 61.8% retracement of the weeks range .
The next target is the low from Wednesday’s trade at the 1.3065 area.
The corrections so far have been shallow. Any buyers have not gotten any satisfaction in buying a dip which keeps the sellers happy and the buyers nervous.
The question becomes if support is found, will the buying overtake the selling we have seen today? One way to test that is by measuring the 38.2%-50% of the last leg down.
The chart below is the 5 minute chart. If the low is in place, I will measure the 38.2% to 50% of the last leg down. The burden of proof is on the buyers to push the price above this area to prove that they can wrestle some control away from the selling. If they cannot, they will be forced to continue to liquidate and the sellers will be happy selling. IF they can, it could signal the end of the trend move down and the beginning of a consolidation phase. The corrective level to watch is around the 1.3096-1.3104 area.
