The EURUSD fell below the 200 day MA (green line in the chart above) earlier today (at 1.28225 today). The price extension on the break, moved to a low of 1.2803 but found buyer against the level. The market tried to keep the lid against the MA level (see the 5 minute chart below). However, when the level gave way, shorts covered, buyers became more confident and the price trended back higher.
If there was good support against the 200 day MA below, there is equally good resistance against the 200 hour MA, trend line and 38.2% retracement of the move down from the September 17th high at the 1.2930-44 area (see hourly chart below). The high today moved between the two extremes and true to form, found the profit taking sellers.
What now? The 100 hour MA at the 1.2886 is joined by the 38.2% of the move up from the lows today. That is the next key level to target below. Stay above and the buyers should feel confident enough for another push toward the resistance above. Move below and the bullish waters from today’s move become a little more murky with uncertainty.
What seems to be clear is that the market is paying attention to the key technical levels. With plenty of news this week to cause up and/or down action, that reliance can be a benefit to the traders who are aware and prepared.
