The EURUSD has now broken above the January highs at 1.1481 and 1.1482, and the February high at 1.1483. The new 2022 high has reached 1.493.
What next?
Looking at the daily chart, the next key target on the topside comes in at 1.1512 to 1.1528. Those levels corresponded with swing lows from October, and November before the break lower on November 10. A move above that level would next target the 38.2% retracement of the move down from the 2021 high. That level comes in at 1.15898.
What helped the snapback move higher today?
The snapback move higher today based near a key support area on the daily chart. That level came in at 1.1369 to 1.13857. That area was a ceiling going back to mid November and December (see red numbered circles). In January, the price extended above that level only to fall back below and then reestablish the level as a ceiling(see red numbered circle seven on the chart above).
In trading last week, the price moved back above that swing area and lo and behold, the low today stalled right in that area before bouncing higher and squeezing back to the upside.
The markets have a funny way of remembering levels and today's low demonstrated that fact (PS the price also stalled at the 50% retracement of the move up from last Thursday's low and just ahead of the rising 200 hour MA as well - see prior posts today).
What would spoil the buyers party on the break to new 2022 highs today?
Looking at the hourly chart below, the price high has reached 1.14943, and is trading back down toward the break of the ceiling at 1.1481 to 1.1483 currently. The best case scenario for the buyers is if the retracement ends up finding a support bid near the old ceiling, and pushes higher from here.
If that does not happen, more patient traders will be watching the 1.14579 to 1.14634 area as the "line in the sand" for the bullish party(see red numbered circles on the hourly chart below). That area was swing highs ahead of the extremes. Move below that area, and all bets are off as traders are likely to be disappointed on the upside break.
