EUR/USD Continues to Take it on the Chin

The EURUSD has fallen below the 50% of the days range and the 100 hour MA at the 1.2727. The level was also the 200 bar MA on the 5 minute chart which increases the importance of the level. I would expect traders to use the level as resistance now. 1.2708 is 61.8% of the days range and below that the 1.2687 will be the next target. This was the high from the non trending day yesterday.

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The GBPUSD moves toward the lower boundary

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The GBPUSD tested the 200 hour MA (green line in the chart above) and found willing sellers against the level.  The price is now back down and looking toward what is good support on the same chart at the 38.2% retracement and the underside of the trendline broken earlier today.  Also, supporting the area is the 50% of the move up from the weeks low.   That level comes in at the 1.5337 level.  So with the hourly showing support at 1.5333 and 1.5336 and the retracement at the 1.5337, look for the price to respect the level and use it to define risk.

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EURJPY falls from upside trendline resistance

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The EURJPY extended to the topside trendline (see point 4 in chart above) and has pushed back toward the flatenning 100 hour MA. The price decline has stalled at the level as traders figure out the next move. I get the feeling the market may look to consolidate for a while at the 100 hour level and midpoint of the move.

GBPUSD playing the range

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The GBPUSD found the support at the 100 hour MA and 38.2% retracement as outlined in the previous point.  Earlier the 200 hour MA and 61.8% retracement level held resistance.  In between is the 50% retracement level gets in the way at the 1.5365. The price off the low, peaked at this level and is now looking a little more weak than strong.

On the daily chart, the price has been largely contained in a narrow range over the last 5 or so days. This came after a pretty decent move lower last week (it was better than the EURUSD range at least). The consolidation has allowed technical tools like the 100 and 200 hour MA to catch up to the price.

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Now the market has a decision to make….Does it want to go higher or lower?  The weekly chart below may provide some additional clues. Last week, while the price was moving lower, the price fell below trendline connecting lows from December 2010 and the low from October .  That move failed to close below the line. As a result, there may be more traders who might get tired with the downside and look to cover/buy a dip.  Use the 100 hour MA as a support stop below. Look for the breach of the 200 hour above to help confirm a more favorable bias and further upward momentum.

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