100 hour MA and price meet. Durable goods awaited.
As NY traders enter for the day, the EURUSDs decline and rising 100 hour MA (blue line in the chart below) has come together at the 1.1410 level. The price is moving below that line as I type and tests the 1.1400 level.
The common currency has moved lower as stock markets steadied/recovered, and comments from ECBs Praet reassured the market that the ECB was there to provide additional stimulus given "downside risks" to the inflation goal (higher EUR, lower commodities are both not helping).
The technical level gives traders the opportunity to define and limit risk. There is some two way action at the area, but the price is dipping more below keeping the bears in control on the day. US Durable goods will be released at 8:30 AM and will have an impact on the pair. The expectations are for -0.4% for the headline (last +3.4%). Ex transportation is expected to show a +0.3% rise.
Looking at the daily chart below, the pair is also testing the broken trend line connecting recent highs at 1.1398 and the low from yesterday at 1.1395. The 50% and the 200 day MA provide other downside targets for traders today.
Patient buyers can look toward the 200 day MA (green line in the chart below) to buy. The break above the 200 day MA last week, was the first look above the key MA going back to July 1, 2014. I would expect that the level won't be surrendered without a strong fight.
On the topside, a weaker than expected durable goods report, will look back toward the 1.1435-65 area as resistance. There have been a number of swing highs going back to Feb in this area (Feb, May and June) and the broken 38.2% of the move up comes in at 1.14457.
The EURUSD has been positively impacted by a weaker stock market. Calls are for a rebound in the US today. We will see how that goes of course. Apple is up about 2.16 in early trading, the S&P futures are up about 36 and Nasdaq futures are up 81.
