Looks to stay below 50% retracement now
The EURUSD has moved away from the 100 day MA (blue line in the chart below at the 1.1034 level today). The pair has also pushed below a trend line support line at 1.0990. The 50% of the move up from the March low is at 1.09638. The price traded above and below the level over the last few hours but the price is breaking lower as I type.
Taking a step back and surveying the EURUSD from the daily chart, the price has been moving up and down since bottoming in March. The first month and a half spent most of the time below the 1.1035-97 area (yellow area). Most of the next few months (May and June) was spent above this price area. There were 7 days where the price closed below the yellow area. Yesterday, the price traded below the area but did close within the area (and above the 100 day MA).
Today, not only is the price moving away from the 100 day MA (bearish) but is also trading away from the dividing "highway" . Significant? It is certainly showing more bearishness.
Zooming in, to the action today on the 5 minute chart, the Asia-Pacific session toyed with moving below the 100 day moving average at the 1.10332 level. In the European London session. The euro started to weaken as concerns about Greece continues to escalate as time ticks by. Yesterday, the European Central Bank added more pressure by increasing the amount of collateral needed to obtain emergency loans. Banks remain closed with capital controls.
Looking at the 5 minute chart, the EURUSD fell to the 1.0957 level - just shy of the 1.0953 level reached on June 29 after the Greeks called for a referendum. The low came in at the 1.0957. The correction off that move could only reach between the 38.2-50% of the last trend leg down.
The pair did extend below the 1.0953 reaching the lowest level since June 10th but bounced. Currently, however, that low is being broken, with new lows being made down to 1.0920. The 1,0953 low and 1.0963 midpoint on the daily chart will now be eyed as close resistance for the pair as the market price seems to be breaking away.
Targets?
Watch 1.0913 (it connects lows on the 4 hour chart (June 5th and June 29th) and the 1.0886 (low from June 1). The low in may extended to 1.0818 and it too could be a target going forward for the pair. The range today is about 130 pips which is about average. So if the price is to trend, it can extend that range. If the market is not going to trend, the price should move back above the 1.0963 level. Decision time for the trend day idea; the bears remain in control.
