The EURUSD has been stepping down today, and the focus for the pair was looking at its 100-day moving average (blue line currently at 1.09132). Recall that back in early July, the price approached that moving average on July 6 and found willing buyers (see chart above).
Today with the dollar buying (EURUSD selling), the price once again approached that moving average and for the 2nd time in less than a month, the buyers leaned against the level. The EURUSDs price has rebounded back to the upside.
Another area that has been “taken back” on the rebound is the swing era between 1.09329 and 1.09421 (see red numbered circles on the chart above). That area is now close risk. .
Buyers showed that they could win a battle, but it took a move all way down to the key 100-day moving average to do so. If they are to continue to prove strength, they ultimately would need to get above – and stay above – it’s falling 100-hour moving average (blue line in the chart above) currently at 1.09926.
The price tested that moving average on Friday. On Monday the price briefly moved above the level only to rotate back to the downside. In trading today after the Fitch downgrade, the price spiked higher, but once again found sellers near that moving average level.
So with 3 failed tries to get above its 100-hour MA, it increases the levels importance. The good news for buyers is that with the moving average moving lower, it is an easier hurdle to get to and through (it is also just another step toward more control).
This article was written by Greg Michalowski at www.forexlive.com. Source