Rebound in stocks eases dollars weakness
The EURUSD had retreated back lower after stocks staged another come back pre the US open.
The pair did find support buyers against the prior highs from Feb/May/ June. Those swing highs came in at 1.1449 (from Feb 19th - blue circle 1), 1.1465 (from May 15 - blue circle 2), and 1.1435 (from June 18 - blue circle 3). The low today came in at 1.1455. The 38.2% of the move up from the August 18 low (the recent trend leg higher) comes in at 1.14457.
A move back below these old highs should be more bearish technically for the EURUSD. Caveat: After the largest decline over a 3 day period in the US stocks, and the wild down and up and down again ride from yesterday, a move below this support level, has to stay below. Volatility can still be high. Currently, the buyers have stuck a toe in the water from the buy side.
Looking at the 5 minute chart, the pair, fell below trend line support in the Asia-Pacific session, then below the 100 and 200 bar moving average (blue and green line in the chart below). The most part the pair has been able to stay below these moving average levels. So they will represent topside resistance in trading today. If the aforementioned support between the 1.1435 – 65 area can hold, a move back above these moving averages will be eyed as confirmation the correction may be over.
