Lots of swing highs in the 114.35-65 area
Looking back in time (to Feb 2015), there have been a number of key swing highs that have stalled rallies in the EURUSD between 114.35 and 114.65 (see daily chart below).
That area has been tested 6 times with the price rotating lower. Once in August 2015, the price pushed above and shot up to a high of 1.1711. In May 2016, there was another break that saw the price extend up to 1.1615. In October 2105 the was a mini break that only saw a relatively modest break to 1.1395. Overall, 10 trading days going back to Feb 2015 traded above the area. Only 6 days had closes above the level. I consider the area a key ceiling for the EURUSD. If the rally is to continue, it needs to get and stay above that level. PS the most recent swing high stalled at 1.1426 back in June 24, 2016. Today's high did take out that high (traded at the highest level since May 11th today)
Drilling down to the 5- minute chart, the price has rotated lower off the 1.1435 high and back below the 1.14.26 level. The pair is waffling above and below the 100 and 200 bar MAs (blue and green lines in the chart below). The 38.2% of the move up from yesterday's Draghi hawkish retraction (the spike lower) comes in at 1.13796. The close yesterday was at 1.1376. If the price cannot get back above the MA lines (at 1.1410), we could see a rotation toward that area, with a move below likely attracting more selling.
On the topside now, I would not be surprised to see the ceiling area against the 1.1426-35 area to continue to put a cap on the gains. It has been a long time since that area was tested and the market should respect it.
