Yesterday, in the NY session at least, the EURUSD trended to the downside. The move down covered 167 pips from top to bottom. This was very similar to the move that took the EURUSD up on Tuesday. Trends transition into non trends and that is what we had up to the FOMC fireworks on Wednesday and is what we are facing today. The 47 pip range is certainly nothing to write home about, but kiddies are out of school now, vacation time has started, no US data today and a heat wave in NY has people feeling lethargic (think zzzzzzz). So although the range is narrow and should be extended, keep an eye out for rejections of any extensions today.

What does the technical picture look like at the current levels?

  • On the daily chart the price held the 38.2% of the 2012 trading range at 1.2744 (bearish). The price is below trend line support currently at the 1.2612. Yesterday, the price fell below the 38.2% retracement of the move up in June at the 1.2570. Support at 1.2516. Resistance at 1.25702. Bias bearish.
  • On the hourly chart, the price fell below the 100 and 200 hour MA yesterday, turning the bias to the downside (at 1.2627 and 1.2602 respectively currently). With the price so far away from the MA, they are likely not in play today. Looking at the last time the price was at this area on June 13, the price based at 1.2514 before moving higher. This increases the importance of the 1.2514-16 level on the downside with the 50% of the June range at the 1.2516 level. Below 1.2516 and the doors open for the downside. The low from the same June 13 comes in at 1.2472. This would be the next target followed by the 1.2462 (61.8% of the June range).
  • ON the 5 minute chart, the price is below the 100 and 200 bar MAs. Both are on top of each other at the 1.2545 and 1.2547 level respectively (bearish below/bulish if the price moves back above). The price is also below the close from yesterdaay at the 1.2539 level (bearish below). The low for the day is at 1.2518 and bottom trendline at a.1.2512.

The burden is on the buyers to push the price higher. If they cannot get the price above the 100 and 200 bar MA on the 5 minute chart (at 1.2547) and then the high for the day, they are not impressing me much. The question today becomes, can the sellers keep the pressure on and push below the key 1.2512-16 area. Usually, with the range so narrow that would not be an issue. With summer heat slowing people down, it might be harder than usual.