The EURUSD moved to the highest level in 4 months in trading today (since March 9). The high today, took out the highs from last week at 1.14512, and reached a high of 1.14672. That was short of the March and 2020 high price of 1.14918.
That was a good news. The bad news is that the rise to the four-month high – and above the swing highs from last week - has failed. The price has rotated back down toward its 100 hour moving average. That moving average currently comes in at 1.14112. Last week on Thursday and Friday, the price tried to move back below that MA line (see blue line on the chart below) and those efforts all failed.
Do the buyers come in against the trend line? Risk can be defined and limited and the recent history shows support buyers against the moving average level. As a result we should see some dip buying. However, a will below should solicit more downside potential. The 38.2% retracement of the move up from the July 10 low comes in at 1.13858. That would be a potential target.
On the topside now the swing highs from last week between 1.1441 and 1.41509 should be resistance now that the break higher failed.