Below midpoint of recent move higher

The EURUSD is starting the US trading session back below the midpoint of the move up from last week's low to be high reached in yesterday's trading (at 1.08745). In the process, the pair has moved below the 100 and 200 hour moving averages (blue and green lines in the chart below) Those levels come in at 1.0890 and 1.08659, respectively. This area is now resistance for traders.

Looking at the 5 minute chart, the decline today got the push on the move below yesterday's low (at 1.09087) and from there, the pair tumbled lower. The last few hours has seen a correction that has retraced about 38.2% of the move lower. The 100 hour MA at 1.08905, the 50% at 1.0893, the declining 100 bar MA on the 5 minute chart (blue line in the chart below) at 1.0893 are all topside resistance levels. Stay below and the sellers remain in control.

Where can the pair go if the market keeps the sell hat on?

  • The 1.0836 is the 61.8 retracement from the hourly chart..
  • The 1.0801 was a low from March.27 and also near high from April 1 and low from April 2 (see hourly chart above),
  • The 1.0759 is the low going back to September 2003 (was a key level in last weeks trading). The midpoint of the move up from the March 13 low is at 1.07587 which really makes that level important. So * that level as a key support target now

Fundamentally, the Fed has created a situation where they have the market confused as to what they really mean. Is data dependent, really data dependent or is it not really data dependent, because of weather, "I think", or other excuses. On the Europe side of the equation, any little disappointment (Eurozone PMI services comes in at 54.2 vs 54.3) is not taken favorably, but I would expect that there will be some more favorable data as well.

What we learned yesterday is the 1.1035-50 area is now an even more solid ceiling. What I outlined above is the 1.0759 level is the next key support level below (50% and low going back to September 2003). In between are other levels like the 100 and 200 hour MA that traders can lean against. That is the roadmap for now. How the data dependent Fed and the data in the US and EU wash out, is still up in the air.