Dollar buying sends the pair back below and away from MAs
The EURUSD shot higher yesterday but left the highs from July 11 and July 15 and a meaningful break of the 200 bar MA on the 4-hour chart to be broken. Sellers leaned against the area.
That break was not to be as Fed’s Williams retracted at least parts of his dovish comments.
Since then what was given was taken away and in the process, the price has moved back below the 100 day MA at 1.12469, the 200 hour MA at 1.12413 and the 100 hour MA at 1.12369. We can set the 1.12359 to 1.12469 as topside risk now. Stay below is more bearish.
On the downside, the low from yesterday reached 1.12046 – just above the 1.1200 level and a lower trend line connecting the July 9 low at 1.11927 and the July 17 low at 1.1199. Do we head down there for a test today?
Drilling down to the 5 minute chart below, the 100 hour MA break at 1.1237 saw the price retest that MA before moving to the new lows (see lower blue line at 1.1237). Sellers were leaning against that MA.
If the sellers are to keep firm control today, I would think that those sellers would do the same thing on a correction higher toward that level. Look for sellers to come in early against the MA if they are serious about taking the pair lower with 1.1200 as a target.