The EURUSD dipped below the 100 hour MA yesterday (blue line in the chart below) and wandered a little lower but not by much. Currently, the price is dipping below the 100 hour MA once again, and trying to ignite some additional selling momentum. The range for the day is still a bit light compared to recent history (less than 80 pips today). You normally get a little more reaction than what we are seeing.

What’s up?

Well, the pair seems to be suffering from a bloated position. Perhaps a case of all the news is out, or month end/week end. The GDP was ok, but it was less than expectations and with 0.82% contribution from inventories, that may not be a good recipe for going forward. Chicago PMI was nice at 59.4 but down from 64.5 in October. Michigan consumer sentiment, not bad. Meanwhile EU inflation lower and unemployment rate down from 11.5% but 11.4% is not something to be proud of. Greek situation comments are volleyed back and forth. Stocks are down (not Amazon though – although down from highs). Gold is back up after testing the 20o day MA yesterday (see: Gold tumbles but moves toward 200 day MA and retracement support). Oil rebounds off new lows yesterday.

EURUSD drifts lower

EURUSD drifts lower

What are the charts saying for the EURUSD?

From a technical perspective, the price this week moved above the “line in the sand” outlined in last weekends video report (Video: What’s next for the euro) at the 1.1209 level during Monday’s trade. Apart from those first 9-10 hours of the trading, the EURUSD traded above that level (still remains a key level going forward) giving the pair a corrective/consolidation feel.

At the weeks highs,however, the 50% of the move down from last weeks high and the 1.1372 level (November 2003 low) acted as resistance. There was a momentum move above those levels on Tuesday, but it was quickly reversed.

With the price currently trading between the two extremes the battle lines are being drawn for next week’s trading (assuming activity remains lightish). We are making new lows now and testing a trend line connecting most recent lows. Little steps. If the price can get below that trend line at 1.1287 currently, there is room to roam with the low yesterday at 1.1260 and the low from Tuesday at 1.1222 a distant possibility. Can we keep the price below the 100 hour MA? That is close risk for traders not keen on weekend risk.

Breaking now as I type, so maybe there is more to come before the trading week is done.