Intraday buyers add another leg higher, but run into July and August highs.
The EURUSD was printing new highs as NY traders entered for the day. The data was better but the correction lower found the buyers right where they needed to be (see prior post). That was against the 38.2-50% retracement area and against the 100 bar MA on the 5 minute chart (see blue line in the chart below). HOLD THAT LINE.. .YOU GOTTA...HOLD THAT LINE...and the dip did. Buyers showed a willingness to stick with the trend higher.
So the pair has taken another leg higher from 1.1150 to 1.1220. Now what?
Well it is time to look to hold the line again. The 38.2-50% of the last leg higher comes in at 1.1185 – 1.11935 area. Find buyers here and the upside momentum can continue. Move below and the "trend -like move" becomes more suspect.
The worry for the traders who are long is the high did take out the July and August highs, by a few pips only to fail. So....to trend (and continue the trend) would require getting to and through that level AGAIN. It never is easy but risk can be defined and limited on the dip, and if there is a break higher (above the highs), it may be a catalyst for additional covering and upside momentum. However, also be aware that there is a chance the party may be over. So eye that support for clues and understand, the high stalled at the high for a reason.
