Topside trend line stalled the rally at the high.
With the FOMC ahead, it is important to understand bullish and bearish break points. What levels are in play.
On the daily chart today the price moved up and tested the topside "old trend line" at 1.2474 area. "Old" because the line was broken last week but each time it was quickly reversed. Call it stop hunting or simply a failed break. What it shows to me, is willing sellers.
As a result, when the "old line" was tested today, sellers leaned and pushed the price lower.
If by chance, the Fed is dovish, that line might be broken and it would be more bullish.
Downside targets on the daily chart come in at 1.2322 (high from January 17th) and 1.2245 (broken trend line - see chart above).
Drilling to the hourly chart, the price is currently trading around the 100 hour MA at 1.2415. That is a neutral level over the last 4-5 days. Below that:
- 1.23945 is the 38.2% retracement of the move up from the Jan 17 low
- 1.23837 is a swing level from yesterday and Monday
- 1.2359 is the 200 hour MA
- 1.23505 is the 50% retracement.
A move below the 1.2350 (50%) starts to target the 1.2323 high from Jan 17.
