Back above the 100 day MA and the bias switches around

The EURUSDs plunge lower, turned around once the price moved back above the broken 100 day MA early in the European session at the 1.1050 level. The "line in the sand" (see prior post from yesterday) was broken and the traders scrambled to cover.

Looking at the 1 hour chart below the corrective move off that move higher has held above the 100 hour MA (low came in at 1.1056 after the break above - see blue line in the chart). The traders mindset turned around at that point and as NY traders enter for the day/week, the gap on the daily chart has been filled. The 100 day MA remains a key level still . I would expect that traders will use it to define and limit risk on downside dips going forward. On a break, look for stops....

What else now?

First, the fundamental risk for increased volatility continues to exist. The parties went and looked over the abyss and it was scary. We now wait on a vote. Other headlines will come. There is the question of the US stock market today and the jockeying of Fed opinion. Will the uncertainty from Europe be the perfect opportunity for the Fed to put off any policy shift. Data dependent has always kept the cards in the FOMC members hand. A declining stock market can ripple through and businesses have not been showing much strength anyway (ref durable goods).

Technicallly, the pair is pushing near the highs with 1.1127-34, 1.1152 and the 100 hour MA (blue line in the hourly chart above) at the 1.1167 level currently. The 50% of the move down from last weeks highs comes in at 1.1181. The topside trend line off highs from Wednesday, Thursday and Friday comes in at 1.1209. All could be in play.

On the downside, the 100 bar MA on the 5 minute chart comes in at 1.1074. The 100 day MA is at 1.1050. In between is the 38.2-50% of the move up from the low. The pair is rising with trend lines supporting the low and the high (see chart below)

Overall, all the cards are now ALL up in the air (stay, go and now referendum). I would probably prefer to sit this dance out. With maybe getting in for a trade on some headline that sends the price to one of the extremes That might be the 1.1050 level on the downside (100 day MA) or the 100 hour MA above at the 1.1169 level or perhaps even the 1.1209 topside trend line (see hourly chart). Perhaps it is best to trade after a headline move that holds a level above or below and use the level to define/limit risk. Then be happy with a profit if the level does indeed hold. Patience people. This is not the best of markets for risk.