Don't panic.
We all wish trading can be like the red box in the chart below. The market was trending and stepping down. Corrections were modest. The trend was a nice run down.
Then it ended.
The last six or so days has had some wild up and down moments. Sure, there have been some areas where traders could lean against a trend line, or MA average, or Fibonacci retracement (you can look as see for yourself), but there have been some moments when the pair has traded in a land of confusion, with the market doing "laps" lower and higher.
Don't panic. Play it cool. Be patient. The market is being pushed around by up and down fundamentals, policy comments, and then there is Greece. The technicals have been wishy- washy as well.
Today, the price moved below the 100 hour MA (blue line in the chart above)in the Asian Pacific session, but rallied in the European/London morning session. The rally higher took the price to the 1.0800 level which if you go back in time, was a swing low on March 27, April 2 and April 7th. From there sellers entered and with better US existing home sales, the bias has shifted more to the downside with the pair finding sellers on rallies toward the 100 hour MA.
With the price back below the 100 hour MA, intraday trader types will switch their allegiance back to the downside with that moving average as a risk defining level (looking at the 100 hour MA, the line has helped define bull and bear - even if it shifts back and forth). Stay below and the bears are in more control.
Having said that there is a level below that looms large now. The 200 hour MA ( green line in the chart above, and the 50% retracement are near the same level at 1.0684). Yesterday, the price moved below, both these levels but ultimately reestablish support against the 50% level and moved higher. The area still remains a technical level to get and stay below if the sellers are to make a further run lower.
If not, it may be time for the EURUSD land of confusion to make another about face and head higher again.
