The EURUSD is ticking to a new high after the weaker than expected ADP employment report showed a 128K rise vs. 300K estimate.
The move higher today is erasing the sell off on the break below the 200 hour moving average yesterday (that break was at 1.0697).
That 200 hour moving average is moving higher and currently is at a higher 1.0708. Traders should have some cause for pause against that moving average level on a test today. The 100 hour moving average is at 1.07196. Should the price started to move above the 200 and then 100 hour moving average, buyers are taking more control back from the sellers.
Recall from Tuesday's trading, the price moved down to test the 200 hour moving average (green line) and found support buyers against the level. On the break below the level yesterday, buyers turned to sellers pretty quickly moving the price sharply to the downside.
Be aware that there could be intraday sellers near the 200 hour moving average with the stop on a break above the higher 100 hour moving average at 1.07196.
Although there should be sellers against the moving average (risk is defined and risk be limited), the rebound off of the lows yesterday gives buyers hope for a move back to and through those moving average levels.
The low price yesterday was able to get below a swing area between 1.0633 and 1.0641 (see red numbered circles). However the price could not get to (nor through) the 38.2% retracement at 1.06187.
On a corrective move to the downside (from the May 13 low), the 38.2% retracement is the minimum retracement to get to and through if the countertrend traders are to take more control. The price decline yesterday stalled ahead of that level. The sellers tried. The sellers failed and the price started to move back to the upside
The move back higher today has been able to take back previous swing lows. The first came in at 1.0661 (see green numbered circles). The second came in at 1.06787. If the price rotates back to the downside getting back below the 1.06787 and the 1.0661 levels would be eyed by intraday sellers to confirm and give more downside confidence.
As I type, the price has just reached a new intraday high 1.0701 but has rotated back down below the 1.0700 level as traders eye the moving average levels above.
