The EURUSD is clawing back some of the trend move decline seen in trading today. That trend move has seen the EURUSD move from a intraday high of 0.98389 to a low of 0.97295. There was little in the way of a correction in that move until recently.
Looking at the 5 minute chart above, the price has been able to claw back above the falling 100 bar MA (blue line currently at 0.9762) and the 38.2% of the trend move down at 0.9771. However, the price has not been able to get above the 50% of the move at 0.9784. That is a problem.
I call the 38.2% -50% the correction zone. In a trend move, if traders can't get above the correction zone, it keeps the trend intact. In this case the trend to the downside. Think of the correction zone as a level that trend traders want to add to their trend position. As such it also represents a level the dip buyers need to get above.
In a trend move, it is important for the counter trend traders (the buyers in the EURUSD) to show they can take back more control. That comes from showing victories from a technical perspective.
Getting above the 100 bar MA in this chart is a victory. Getting above the 38.2% is a victory, but if the 50% can not be broken, the sellers still hold the edge.
So sellers still have the edge in the EURUSD. A move back below the 100 bar MA would increase that edge and could lead to a resumption of the trend move, with a retest of the lows certainly a possibily.
Conversely, getting above the 50% at 0.9784 takess some of the control away from the trend sellers. So be aware. Follow the clues from the price action.
