The EURUSD fell to just below parity on my chart (at 0.99993) in the London morning session. There was a bid against the level as option and the natural support at the level attracted buyers. The price last traded at parity during the week of December 2, 2002. A strong test and buyers held the line.
The subsequent move higher has taken the price on the hourly chart above, back up toward the swing low from Friday at 1.00705. The high price reached 1.00686 just below that target.
Getting back above that level is a small win for the buyers (as was holding the 1.0000 level as well by the way). Move above that, and a downward sloping trend line followed by the falling 100 hour MA (at 1.01332) are resistance targets. There is a swing area near the 100 hour MA between 1.0134 and 1.0143.
Although the EURUSD is oversold and bounced at a nice round number, the fundamentals are in favor of the USD. However, US yields are lower for the 2nd consecutive day which is positive for the pair after last week's near 25 basis point rise in yields.
Drilling to the 5-minute chart below, the price rise has also taken back above the 100/200 bar MAs (blue and green lines). Yesterday, the price trended lower after breaking back below those MA levels early in the Asian session. In the early Asian session today, the 100 bar MA was tested and fell off toward the parity level initially. After a bounce which saw the price move above the 100 bar MA, but remain below the 200 bar MA, the price fell to the low for the day before finally breaching both the MA levels.
ON the topside the 38.2% of the move down from last Friday's high (at 1.00728) is cutting across just above the swing low from Friday at the 1.0070 level increasing that levels importance going forward.
Today if the 200/100 bar MAs on the 5-minute hold support AND the 1.0070-73 area is broken above, the buyers start to take back more control. Watch those levels for intraday support and resistance.
