The EURUSD fell below the swing area that has confined the trading range since April 27 after an up and down session yesterday ultimately closed lower on the day and that momentum continued in the Asian session.
Looking at the hourly chart, the pair has been trading between 1.0470 and 1.064 $0.01 April 27. Between those extremes there was a swing area between 1.0567 and 1.05769.
Yesterday, the price at this time (shortly after the CPI), the EURUSD price fell below the 100/200 hour moving averages (blue and green lines), but could not sustain downside momentum. The price started to move back higher and moved back above the converged 100 and 200 hour moving averages (blue and green lines in the chart above). The high price extended and returned back to the aforementioned swing area between 1.0567 and 1.05769, and found willing sellers for the 2nd time in the day. Buyers turned to sellers and moved the price back below the aforementioned moving averages again. This time the price stayed below those levels and closed near the lows.
In the Asian session today, after a brief rally, sellers returned and pushed the price to the downside. The European session saw the pair break below the swing low from April 28 at 1.04703. The price has been stepping lower since that break (as he would expect).
The EURUSD price today bottomed at 1.0388. That is still above the swing low from early 2017 at 1.0339. A move below that level MMXVII low would take the price to the lowest level since 2002 and have traders talking of parity is the next key target.
What would hurt the negative bias?
The 38.2% retracement of the move down from yesterday's high comes in at 1.0460. That is about 10 or so pips away from the swing low from April 28 at 1.04709. Of course the price broke below the and outside of the up and down range at that point. Moving back within the "red box" would be a disappointment for the sellers and could lead to sellers turning back to buyers on the failed break.