Intraday overhead resistance being tested
The EURUSD has two legs to the downside today. The first from 1.1043 to 1.0957 corrected to between the 38.2-50% "correction zone". As those who have taken the ACT traders course, I look for a trend move to prove itself by staying in this zone. If it can, that is good news for the trend.
This second leg lower has been a little less "trendy". There was a steeper correction early in the move but the pair did gather more downside trend-like momentum on the last break (it was the 3rd of the day) through the 50% retracement level of the move up from the March 2015 low at the the 1.0963 level.
The correction of the move down from the 1.0996 to the 1.09157 level has stalled right at the 50% level at 1.09558. This is also below the 1.0963 level (that midpoint line in the sand). So the sellers remain in control.
Now, the market is a little less trending. The low for the day did find support against a lower trend line on the 4-hour chart (see prior post), but the shorts remain in control. The longs are likely still feeling a bit nervous, but there may be continued patient buying on dips toward the lower trend line with stops below (see 4-hour chart below).
