Extension to new highs for week fades, but buyers come in near 100 day MA
In today's trading the EURUSD extended above the weeks highs at 1.1094 with a new high extending to 1.11236.
However, enthusiasm faded, the price came tumbling down. It wasn't until the 100 day moving average was tested at 1.1030 that the downside momentum was halted. The low for the day reached 1.10232 and as NY traders enter for the tradingday, the momentum has pushed the pair back up toward the 100 and 200 bar MA on the 5 minute chart (blue and green lines in the chart above). Those levels come in at the 1.1063-67. Greece anxiety keeps the pair under wraps but the key meetings are not to take place until Saturday. So there exists the potential for position ahead that could push and pull the price.
The trading range for the day is 100 pips. The average trading range over the last month is starting to head lower into the traditional summer decline but is still up at 127 pips. So there is room for an extension today.
If bearish, selling against the MAs at 1.1063-67 and the 50% of the days range at 1.10734 level seems an area to define and limit risk. Understand, however, that the selling below the 100 day MA today at 1.1030 was not exactly met with lots of enthusiasm by the sellers. In fact it showed that buyers like that level too.
So there is a battle being waged.
Initial claims are due at 8:30 AM with estimates at 275k vs 281K. The 4 week average is at 274.75. Anything less than 279k will lower the 4 week average. I would like to see a test of either extreme and go from there. In other words, I am not in much of a hurry. In these non trendy markets, it pays to be patient.
