The EURUSD moved above its 38.2% retracement of the move down from the September 12 high on Friday following the snapback rally post the US jobs report. That level comes in at 1.05709.
Today, the price gapped lower at the open after the weekend news of the Hamas bombing in Israel. After a brief rally at the start of the trading day took the price back above the 38.2% retracement at 1.05709, buyers turned back to sellers and forced the price to and through the 200-hour moving average (green line in the chart). However, the 100-hour moving average could not be breached. Two separate tests so that 100-hour moving average resulted in buyers leaning. That was enough to push the price back higher and toward a swing area at 1.0551 and 1.05572.
More consolidation eventually led to a rotation back to the upside and above the swing area (above 1.0557). The price has now stretched back toward its 38.2% retracement.
Getting and staying above the 38.2% retracement after a trend move lower is important for buyers to prove that they are taking back control. They had a shot on Friday and earlier today but failed.
Can the buyers take another shot and get and stay above that level going forward?
That will be the question that needs to be answered as we head for the new trading day.
This article was written by Greg Michalowski at www.forexlive.com. Source