EUR/USD down to a low of 1.1616
The pair is now testing support at the 200-hour MA (blue line) @ 1.1620. This is a key near-term level to watch in the pair as a breach below will shift near-term sentiment back in favour of sellers.
Further support is only seen at the 1.1600 handle now with the 23.6 retracement level @ 1.1589 also sitting nearby.
So, what should we expect heading into US trading?
First off, there's US data to navigate through but risk can be defined and limited by the technical levels mentioned/shown above.
Following which, the other thing to consider today is the large expiries that are rolling off at 1400 GMT later. There is a host of them sitting between 1.1600 and 1.1690 so that will be one to watch as they will attract prices should we trade nearby. Right now, the large ones sitting at 1.1600 and 1.1625 are the two obvious anchors for the pair and the one at 1.1650 - near the 100-hour MA (red line) will also be one to watch out for.
Once the dust settles, it's back to the drawing board for the pair and trading thereafter will depend firstly on risk sentiment in the market but also where price action has left us off. If sellers hold below the 100 and 200-hour moving averages, near-term bias favours the downside more and we may very well be heading back towards the 1.1500+ levels.
But if buyers can sustain a move back above the two hourly moving averages, a bounce back towards the 1.1700 handle is very much on the cards.
Right now with price still in between the two "goalposts", staying on the sidelines is probably the best trade you can make.
