The EURUSD has tumbled on the back of Draghi today. It is not new news. It just came at a vulnerable time for the EURUSD as it struggled with correct higher above the ubiquitous “blue box” I have been talking about this week (see chart) and the 1.2499 area below (which was the equally ubiquitous red box also talked at length in posts this week). The up and down battle was won by the sellers on the break and the pair tumbled through the 200 hour MA (green line in the chart below) at the 1.2490 level, recent lows and the lower trend line connecting the recent lows for the pair at the 1.2438. This is now close resistance for the pair in trading today. The next stop is the red box lows which come at the 1.2394 level. The low for the year (or bottom of the blue box (this is becoming a cliche) comes in at the 1.23572 level.
EURUSD has tumbled lower and looks toward the 1.2394 level now.
Can the market break out of this 15 day up and down range? Do the technicals match the fundamentals? Yesterday the data in the US was largely positive. The EU data was not great. The market ignored the data. Today, the reminder from Draghi has not been ignored.
Moreover, although it appeared the EURUSD had that support feeling yesterday, on the daily chart the pair had not yet broken above the topside trend line (see chart below). So there was a battle going on between the support against the 1.2499 level and the resistance at the 1.2577 level The pair remained in the “Land of Confussion” – I got the picture SEE POST: Forex Technical Analysis: I get the “technical” picture in the EURUSD. The buyers certainly had their chance. They could not take control with a break above.
I still get “the picture” that the “marke”t is looking at, and the levels (see chart above). The “market” (i.e. buyers and sellers) action will define if the downside can continue today. We have to listen to it. However, the fundamentals, in my mind, still say EURUSD lower. So look for rallies to find sellers.
The daily chart shows sellers still in control
