Holds support against 1.08000
Here is how I see the EURUSD.
- The bias is more bearish. The high price on Monday, extended above trendline resistance and high swing prices from December 30 in January 4 at the 1.09438 area. That break failed and the price has been ratcheting lower.
- Yesterday the high price stalled at a resistance area where there have been a number of swing lows and swing highs (see upper yellow area in the chart above). That is bearish.
- The price yesterday. Also spent a lot of time below the 100 and 200 hour moving averages. There was a late North American session break to the upside, but that rally fizzled.
- Lower target/support at the 1.0788-1.0802 area held in European trading today (see lower yellow area in the chart above). The low after the ECB decision on Dec 3, bottomed at 1.0788. This is also the 50% of the move up from the December low (not shown). The low price on December 7 was at 1.0795. The low price on December 17 came in at 1.0802. The price earlier this month made it's way below this area but most activity is above this area going back to the ECB decision day on December 3.
- The 1.0770-72 was a swing high on Jan 6 and a swing low on Jan 7. This is the next key target support on a break lower today
- 1.0710. Lows for 2016 come in at 1.0710 (on January 5) and 1.0711 (on January 6). Needless to say, key support.
Traders last leaned against the 1.0802 level (low came in at 1.0804 today). The price is trading below the 50% retracement level at 1.08393 and the 200 hour MA at the 1.08436. (current price is at 1.0825. Patient sellers should enter against this area in trading today (a risk level). If the sellers are to remain in control, this area should hold resistance.
Looking at the 5-minute chart, the 200 bar MA comes in at 1.0829. This and the 1.0837 (swing highs today) should also provide upside resistance if the sellers are to remain in control in trading today.
Overall, we are in an up and down European session with support holding from the intermediate term perspective. The sellers have been prodding lower. The low price stall may be the limit for now, but there are some upside levels that still need to be broken to prove that 1.0800 is it for now. Until then, dip buyers against that support are hoping for a break but sellers may are also staking their claim to control.
