As NY enters the fray, the EURUSD is testing the 100 hour MA (blue line in the chart above). This moving average was broken yesterday for the first time since May 22nd and the momentum higher started. That momentum did not stop until the price extended above the 200 hour MA (green line), and longer term trend line going back to the May 1st high. When the price reversed and broke back below these key levels today (at 1.2477) , the selling intensified and took the price right to the 100 hour MA (blue line) where the price decline slowed (at 1.2410).
The failure above and move back below the 1.2477 level (200 hour MA) puts the pressure back on the pair (and gives a bearish bias). I will be watching the correction off the 100 hour MA to see how aggressive sellers are going to be this NY morning. The high correction has so far comes in at 1.2440. Above that the 38.2% of the move today comes in at the 1.2459 (see 5 minute chart below). I would expect that sellers will use this area to define risk and sell. A break below the 100 hour MA at 1.2410, shows the sellers are more anxious. Look for continued downside momentum with the low for the week at 1.2383/85 the next stop (low for the week and 61.8% of the move from the low). Below that the 1.2359 level and the low from Unemployment Fridayat 1.22862 become the next targets. Longer term, a move through that low would intensify the bearishness with the 1.2131 the next key target. This is the 50% of the move up from the 2000 low.
What has to be remembered is the range is already about 133 pips today. This is comfortably above the 20 day average of about 111 pips. As a result, I would expect the 1.2383 to put up a fight on a break of the 100 hour MA (profit taking on the first look). If broken however, do not ignore. Trends are fast, directional and have larger than expected trading ranges.
