Support/Resistance trading...
The EURUSD rallied mainly in the European trading session. However, the pair continues to be pushed and pulled from different stories:
- Greece
- Fed's intentions
- Bond sell off
- Stocks down
And then there are the technicals...
The low for the day could not take out the lows from yesterday's up and down/narrow trading range day. The push higher today (was it Dudley, was it mixing up from bond/stock selloff?), stalled short of the 1.1287-91 area which has highs from May 1 and May 8 (along with 61.8% retracement). The high could only get to 1.1278.
The fall has taken the price back toward the 100 day MA (blue horizontal line at 1.1218 is the overlay of the 100 day MA today). The 100 and 200 hour MAs (see blue and green MA lines in the chart above) come in at the 1.1235 and 1.1209. Does the 100 day MA and the 100 hour MA (two blue lines) hold support between 1.1218 and 1.1235? Do you wait for the 200 hour MA to find support?
Conversely, were the sellers at the highs (against the 1.1287-91 ceiling), the correct trade for a rotation back toward the lows.
I will give the 100 day MA, the sharp move higher today, the 100 and 200 hour MA, the benefit of the doubt for the time being and watch to see if the intraday support can hold. Do I totally trust it? Not fully, but risk can be defined and limited as the market continues to find it's way.
