Stays below the 100 hour MA
The EURUSD has moved lower in trading today.
The catalysts?
- The price could not get above the 100 hour MA . In the early European and London trading, traders leaned against the declining 100 hour MA. If you recall yesterday, the 100 and 200 hour MA and the 38.2% were all converges at the 1.0657 area. The high yesterday stalled at 1.0651 (close enough to that cluster of resistance).
- The price also broke back below the 100 bar MA on the 4 hour chart (currently at 1.06325).
- The FOMC will hike rates in less than 30 hours now and that might give more of a bearish bias (although US bond yields are 1 to 3 basis points lower).
The price decline has rewarded shorts with a modest move to the 1.0603 level - just above the 1.0600 level. Looking at Mike's option expires, there is a modest amount of expires at 1.0600 (1.2B). Buyers leaned against the level. Why not (see last nights wrap)? We are now moving back higher with the price testing the 100 MAs (4-hour at 1.06326, and 100 hour MA at 1.0643). With the range so narrow today (47 pips), the low and high are never that far away. Import price index just came out mixed with the MoM -0.3% vs -0.4%. The YoY was a touch lower at -0.1%. The prior month came in at -0.3%.
Going forward, SHOULD we do get above the 100 hour MA at 1.0643, the 38.2% and the 200 hour MA loom ahead at 1.0657 and 1.0661 respectively. A break above those levels will have the pair looking toward 1.0689 (high from Dec 2) and the 50% of the move down this month at 1.06985 (was also the swing low from Dec 6th).
I like the bounce off the 1.0600 level ( PS it was the 38.2% of the move up from the low too at 1.06028 - nice bounce). The hurdles are the technical hurdles ahead. I can see, traders leaning and risking a little to make a little more than a little on the trades. BUT if there is a break, getting more toward the 50% of the month range is a doable (but don't expect a runaway)
