Tests channel and retracement level

The EURUSD got a kick higher on the back of the weaker Durable Goods data. The move pushed the pair above the 100/200 hour MAs (blue and green lines at 1.1279 and 1.12926 respectively) and topside trend line and 50% retracement of the move down from last weeks high. That area comes around the 1.1305 level. That area is being tested now. Will resistance become support now and will be get a boost higher?

A move below the area takes some of the bullish momentum away and a rotation back toward the 200 hour MA at 1.12926 will be looked at for the next support area. We will see.

The big yellow area in the chart above (and easier seen in the 4-hour chart below) corresponds with swing low and high levels going back to March 17th. From March 31 to April 13, the pair bounced in this area. Since that time, there were two other attempts to extend above the area. Each failed (see red shaded area in the 4-hour chart below). If the support holds, that is where we will be going to test next. A move above will increase the bullishness for the pair

Overall, it is tough to get and keep things going in this pair. The move lower from the peak got the 38.2% of the move up from the March low but stalled when things could not go further on Monday (yesterday). Today, the Durable Goods adds another notch to the slow GDP growth in the 1Q. Sure the headline number was stronger than last month but last month was -3.1%.