The EURUSD tried but it just couldn’t do it. The price needed to – and still needs to – get below the 1.1743 level to give the sellers the confidence for the next leg lower. It needs to get out of the blue box (see hourly chart below) defined by 1.1743 below and 1.1876 on the topside. As expressed in the earlier post (CLICK HERE),

Is it advised to buy against the 1.1743 area? Risk can be defined and limited against that level, and the market does get used to buying low and selling high when it non trends. So you will probably not be alone.

EURUSD on the hourly chart remains in the blue box

EURUSD on the hourly chart remains in the blue box

The low was able to take out last weeks low by about a pip, but that was it at 1.17522. The 1.1743 level remains a target as well. With the double bottom, 1.1743-52 now becomes the support area.

If the buyers below are to gain more upside momentum now, the midpoint of the days range at 1.18056 will be eyed. A break will then likely move toward the 100 hour MA at the 1.1818 level currently (blue line). We remain in the confines of the blue box.

EURUSD  bounces of the recent bottom.

EURUSD bounces of the recent bottom.

Tomorrow at 08.30 gmt, an opinion on OMT (outright monetary transactions)will be announced (see Ryan’s excellent post “ECB to face first QE legal hurdle as EU court offers first opinion on OMT“). The expectations are for there not to be a problem but as Ryan points out there can be volatility on the announcement and headlines. This may be a catalyst for the next move in the pair.

Also of interest will be the US retail sales which are expected to show little growth in December. However, if you take out gas (obviously lower gas prices lead to lower gas sales) the gain is expected to show a 0.5% advance. That would have the last three months showing +0.7, +0.6 and +0.5%. When you look at it in that respect, it is not bad. Those are the next possible catalysts for the pair.

The fundamentals still favor down vs. up but we still need to break out of the box and stay out of it.