The EURUSD raced higher today, and in the process extended above the 50% midpoint of the move down from the August high. That level comes in at 1.09148. The price also moved above a swing area between 1.0911 and 1.09179 which brackets that 50% midpoint level.
Above that the 100-day moving average was also broken at 1.09258.
The high price moved to 1.09448 about 6 pips short of the next target at the 61.8% retracement at 1.09501.
Sellers have not taken the price lower over the last 3 trading hours and in the process, the price has broken back below the 100-day moving average. That’s a disappointment as the 100-day moving average had stalled rallies (give or take a few pips) on August 16 and again on August 22. So breaking above today was a bullish development. That break is failing.
What next?
Moving below the 50% retracement would be another negative for the pair. Conversely, if the midpoint level can hold, and the price extend back above the 100-day moving average, it would give buyers more confidence once again.
So it’s all about the 50% midpoint area? That’s the line in the sand for buyers hoping for more upside.
This article was written by Greg Michalowski at www.forexlive.com. Source