The fall from the 1.5600 level is like the EURUSD high at 1.2623 – a perfect level to stall. Like the EURUSD, it is time for the sellers to take control. To show their strength the next target to get through would be the 38.2% of the days range. That level comes in at the 1.5534 and the low has just touched that level and bounced. The broken topside channel trend line (broken earlier today) comes in at 1.5555. Will the sellers show up against this level. Let’s see. Additional resistance at the 1.5567.
The buyers have pushed the price up over the last two or so days of trading. The price is up on the day. The BOE kept their rates and Asset Purchase unchanged today which was supportive to the pair. However, Fitch did warn that if economy slows, their rating might be at risk. Bernanke being more neutral hurt the QE dollar sellers. So the news is more neutral.
Technically, the 1.5600 holding is great, but sellers need to overtake the buyers and convince more traders the downside is now the way to go. Get below 1.5534. Get below 1.5521 Get back down to the 200 hour MA at the 1.5483. Those are the steps for the sellers.
