Flight into the USD sends EURUSD lower, but being offset by weaker Empire manufacturing data
The EURUSD fell as flows tended into the USD as expectations of the speeding up of the fed taper, and Afghanistan developments (flight to safety flows) helped to push the dollar higher.
The declines come after the sharp rise on Friday which saw the pair move up toward the 50% retracement level of 1.18067 (move down from the July 30 high - see hourly chart below). The Michigan consumer sentiment index plunged to 70.2 from 81.2 last month The high stalled at 1.18043 just below that level.
The move lower today took the price back below its 200 hour moving average at 1.17718, but as seen a rebound after the weaker than expected Empire manufacturing index (18.3 versus 43 last month and estimate of 28.9). The price currently trades back above the moving average barometer. Buyers and sellers are battling but some of the bearish bias has come out of the market with the buyers now a little more in control again..
On the topside watch the 38.2% retracement at 1.17828 for clues.
- If sellers can keep the price below that level a rotation back through the 200 hour moving average can be expected. Stay below the 200 hour moving average and traders would target 1.17626, a swing area between 1.1751 1.17566, and the rising 100 hour moving average at 1.17457.
- Conversely, ,ove above the 38.2% retracement at 1.17828, and a rotation back toward the 50% retracement (and swing area between 1.18019 and 1.18043) cannot be ruled out.