The EURUSD moved higher after the Fitch US debt downgrade and in the process extended back toward its 100-hour moving average (blue line in the chart below). For the 3rd day in the last 4, sellers leaned near the level and stalled the rally. A few hours later the price was tilting back to the downside as buyers gave up, and the sellers took more control.
The inability to get and stay above its 100-hour moving average increases the moving average levels importance going forward. The moving average is currently also trading at the 61.8% retracement of the July trading range at 1.10017 further increasing it’s importance. Putting it simply, staying below is more bearish. Moving above – and staying above – would tilt the short-term bias more to the upside.
On the downside, the low from yesterday (and the trading week) comes in at 1.09516. Below that is a swing area between 1.09329 and 1.09421, and below that and traders will be targeting the key 100-day moving average comes in at 1.09134. Back on July 6, the low price on that day found buyers against the key moving average level. The last time the price traded below the 100-day moving average is back on June 15. It will be a key barometer for both buyers and sellers if tested.
So sellers in control below the 100-hour moving average. The swing lows and the 100-day moving average remain key support targets on the downside.
This article was written by Greg Michalowski at www.forexlive.com. Source