The EURUSD has had a string of 5-up bars on the hourly chart in the late London morning session/early US session. The run to the upside has seen the price extend away from the falling 100-hour MA at 1.0939 and into and above a swing area between 1.0965 and 1.0975.
The next key target comes against the 38.2% retracement of the move down from the December 28 high. That level comes in a 1.09864. Above that and the 200-hour moving average 1.09999 (call it 1.1000) would be the next target. The price fell below that 200 hour moving average last Tuesday to start the trading year..
In the short term, the best-case scenario for traders would be to hold the 1.0965 level and base for a further run to the upside. Conversely, a break below that level would give buyers some cause for pause. Beware.
Going back to the low for the day, the inability to increase momentum below the swing area at 1.0929 (renumbered circles on the chart below) gave buyers the start to the move higher. That level at 1.0929 remains a level of importance going forward. Remember.
Meanwhile, mentally, lower yields are helping the dollar selling after the better Fed inflation expectations data. The 10 year yield is down -7.0 basis points at 4.971%.
US stocks moving higher may also be contributing to the dollar selling. Last week the stocks fell, yields move higher, the dollar moved higher. Today – it’s only one day – stocks higher, yields are lower and the dollar is lower.
The S&P index is up 30.51 points or 0.65 percent at 4727.70. The NASDAQ index is up nearly 200 points or 1.36% at 14721.32.
This article was written by Greg Michalowski at www.forexlive.com. Source