Picking a top in a trend (even a temporary one) requires a tight stop/luck
Earlier I used the headline "Forex technical analysis EURUSD backs off (a little)". I commented how the EURUSDs price rise had slowed but there was not much in the way of resistance. As a result, the correction would be more important. If the 38.2-50% of the last trend higher could hold, the bulls remained in control.
Well, the 38.2% -50% did hold. The correction stalled. The bulls remained in control. The price extended to new highs.
It is time for "EURUSD backs off (a little) - Part 2". The dynamics remain the same or similar at least. The buyers are still in control, but the rally has stalled - a little. A difference this time is that whereas the price stalled the last time at a more or less random spot, the high now got within 10 pips of the high set on May 7th. That may be close enough for "government work".
The price has spent the last hour trading below the high at the 1.13817, and a low at the 1.1368. Not much range there, but the range for the day is 180 pips (remember we started the NY session with a 66 pip trading range). Not a bad day's range.
Having said that, if the market is to rotate lower from here, the sellers have to show they can take back even the smallest of control. How can they do that? By trading below the 38.2-50% of the last trend move higher (from 1.13018 to 1.13817). That retracement zone comes at the 1.13417 -1.13512 area. If that level can be tested - and broken - the sellers would have won a battle. If they cannot push it below that level (and stay below), the buyers are in full control and I would not rule out a move to and through the highs going forward (might be tomorrow). The next upside targets are at 1.1449 and then 1.1515 (50% of the move down from the December consolidation high).
