Euro technical analysis December 11, 2014
From low-to-high today, EUR/USD has been able to hold above the 50% of the move down from the November high at the 1.24229 level (see hourly chart below) . So long as it stays above, the bulls remain in control.
The EURUSD could not go below MA support, so the price went up.
The love/hate relationship for the pair (i.e., bullish and bearish up and down action over the last few day), has reversed most of the down action of yesterday. The catalyst for the upside today seemed to be the inability to make any move below the 200 or 100 bar MAs (green and blue lines in the chart above). If the sellers can not break support, the price is not going lower (and has to go higher).
Other technical positives today were the aforementioned move above the 50% of the move down from the November high. That level comes in at 1.24229. This is now a level that has to be breached for the sellers to be happy. As such, it is also risk for the bulls.
Another influence to the upside for the EURUSD today is the USDCHF bearishness and that impact on the EURCHF as it gets closer and closer to the 1.2000 level (low was 1.2007). If the USDCHF is going down, the EURUSD has to go up to keep the EURCHF from going below 1.2000. Putting it another way, if the EURUSD is the dog, the tail(s) – in the form of the USDCHF and the EURCHF – seems to wagging the dog as a result of the 1.2000 floor for the EURCHF. It’s all in the math. With it being Friday, I guess the SNB will be staying late to make sure the 1.2000 level is not breached.
USDCHF and EURCHF may be the tail that is wagging the dog (i.e., the EURUSD)
Euro weekly technical analysis
For the week, the low was made on Monday at the 1.2246 level This was near the lower trend line on the weekly chart that came in at 1.2225 (see chart below). From there (focusing on the hourly chart above), the price squeezed higher on Tuesday – reaching trend line resistance.
The rest of the week, has been about
- Staying above the 1.2357-59 lows from November (bullish). That is the floor
- Saying below the 1.2500-1.25008 high resistance (the high reached 1.2492 so far). That is the ceiling
- As mentioned, the 100 and 200 hour MA (blue and green lines in the hourly chart) and now 50% retracement of the move down from November high at 1.24229, have also created higher support levels that traders have been attaching significance to over yesterday and today (bullish).
As a result, the buyers have had the upper hand (and keep it).
However, as mentioned a few times this week, they still have some proving to do, and there remains the concerns about the EU economic environment vs the US environment. Despite that, it has been a week with more buy the dip action. That action has been at technical levels which shows the importance of seeking out these levels.
Going forward (and this includes into next week when the Fed decision will be released), if the price cannot go down (or break below the 50% or below the 100 and 200 hour MA, or below the November lows and then stay below these levels, then the price has to go up. That has been pattern, we have been seeing this week. A move above the 1.2500 to 1.2508, will have the pair targeting 1.22532 and then 1.2577.
The EURUSD got close to the lower trend line on the weekly chart this week.
