The 118.22 level holds on the downside.
Yesterday, I spoke of the importance of support in the 118.22-50 (CLICK HERE and see chart below). The area corresponded with swing lows going back to Feb 2015 (see chart below).
We could not get there yesterday due to other interim technical support(a recover stock market helped as well). However, today when things started to unravel for the pair on China/No Korea concerns in Asia Pacific session, traders waiting for the level showed up and bought the dip Later in the London/European session the traders had a second shot to buy against the level, and they did again (the low reached 118.24).
Now the price is back above the upper level of the support area (at 118.50) and that level now becomes close support. Stay above, and the buyers may start sticking more of a toe in the water. Move below (and stocks could get in the way) and the bias would shift back lower (or at least potential for another test below).
Looking at the 5-minute chart, the 100 bar MA (blue line at 118.51 currently) is another reason for support. A move above 118.70 should be more bullish.
