The high today stalls near the old swing ceiling area
The EURUSD this week, swung above a ceiling area at 1.21435 and 1.21496 during Tuesday's trade on its way to the high for the week at 1.21690. That break (see red numbered circles) could not be sustained, however, and the price started to tumbled lower breaking below its 100 hour moving average (blue line) and 200 hour moving average (during Wednesdays trading).
The low for the week extended below the 50% retracement level at 1.20603 and a swing area between 1.20493 and 1.20579 (also on Wednesday). The low price reached 1.20226 before bouncing higher on Thursday (basing at the 61.8% retracement).
The run higher during yesterday's trade saw the price move back above the 50% retracement level. Before moving higher, the traders retested that midpoint on a number of swing lows, found willing buyers and that was the technical clue to move higher.
Today, the return to the 100 hour moving average was initially tested in the Asian session and stalled the rally. However, that line and the 200 hour moving average (green line) was later broken coming into the European session, and the pair rumbled higher only to stall near the old swing high area between 1.21435 and 1.21496 (see red numbered circles).
What now?
Old ceilings, that are broken, can tend to reestablish themselves as ceilings on retests. That is what happened today and traders will likely continue to use that area (up to 1.21496) as a level to sell/lean against with stops on a break above.
If the price does hold resistance (stay below), a rotation back down toward the moving averages (and the 1.2100 level) would be eyed as support. If the buyers are to stay in control (they have wrestled that away from the sellers from earlier in the week), staying above the MA would be eyed.
If the 1.21496 is broken, however, look for a retest of the highs for the week.
