Trading the technical levels.
The EURUSD created a ceiling yesterday in the 1.1311-19 area. That ceiling was respected in the one test today in the Asian session and the price moved lower. The move lower got a shove on the break of the 100 hour MA (blue line currently at 1.12815. That was the first break since May 26th), and below the low from yesterday at 1.12676.
The low bottomed at 1.12402. What is the significance of that level?
Looking at the daily chart, the 1.1240 level was in the middle of a swing level on the daily chart at 1.1238-48 (see chart below).
The decline today was textbook as traders leaned against intraday resistance (ceiling), broke through support on the intermediate term (100 hour MA), and held a support target from a longer term chart (key swing area).
The price rise off the daily chart support has now moved back above the 100 hour MA at 1.12815. Guess what lies above? The old ceiling at 1.1311-19.
The price action is doing it's ABC's.
With support holding and the price moving back above a broken level on the way down (100 hour MA), traders will now take clues from the 100 hour MA below and the swing ceiling above. Look for momentum in the direction of the break.
The market is doing it's ABC's.
