The EURUSD has had the post-Draghi correction that has taken the price back up to test the Correction Zone defined by the 38.2-50% of the trend move lower. That level comes in at the 1.24446-1.24600 level. The level holds on the test and keeps the seller in control.
EURUSD coorects to 38.2% and finds sellers
In my pre-Draghi comments, my lowest target for the day was at the 1.2481-88. I wrote:
A move below the 1.24386 will look toward the 1.2381-88 area(this was a series of highs going back to July/Aug 2012). A move to this area would be about a 145 -150 pip trading range for the day. The average range for a day (over the last 22 trading days) is around 110 pips so this would be pushing a limit (does not mean the end but it would be a good day). If the price were to head down toward this target, the range for the week would be around 187 pips. That would represent a more normal weeks range from the recent history.
The low has come in at 1.23947 so far – 6-7 pips away from the top of the target. The last time the market was this low was in August 2012 (see chart below which looks back to 2012). At that time there was an 8 day period where the price trade in a narrow non- trending range with highs banging against 1.2388 (see chart below). On the 9th day, the price broke higher and that led to a trend move higher in the pair. The level was not tested again until today. Moving back below this area opens up the downside for some further momentum going forward.
A look back at the last time the price traded at these levels back in 2012