Watch 1.18507 as close resistance now
The EURUSD as seen law the move up and down today with the most recent one being to the downside after the better than expected services ISM data and Clarida comments.
The run to the downside took the price to - and through - a swing area between 1.18467 and 1.18507, and also back below the 38.2% retracement of the range since the July 20 low. That level comes in at 1.18482. The pairs price also moved below its 200 hour moving average (green line) for the first time since last Wednesdays FOMC day when the price chopped around before moving higher. That moving average comes in at 1.18406. The price is trading above and below that level over the last hour (and is trading just below it as I type).
Going forward, moving below the 200 hour moving average would have traders targeting the 50% retracement at 1.18296. Below that and traders will look toward the 1.182082 1.18243 area and below that the 61.8% retracement at 1.1811.
The close risk is now the 38.2% retracement at 1.18482, up to the high of the swing area at 1.18507. Stay below that area and the sellers are more in control.
Of course the bias has shifted from buying to selling to buying to selling on a number of occasions today. The buyers took control earlier in the New York session on the break above the 100 hour moving average up at 1.18745, and the price even extended above a swing area target between 1.18928 and 1.18965. The high from July at 1.1908 was in traders sites.
However, traders still need to listen to the price action, and the subsequent failure of the break above the 100 hour moving average, put the sellers back in control and the price tumbled lower (from a technical perspective).
In that same way, the 38.2% retracement and swing area is now the barometer for the sellers to keep control, a failure could shift the bias back around. The market traders are certainly used to it today at least, but it has to happen first and is the risk of trading in a volatile market.
