The EURUSD could not close an hourly bar above the 38.2% retracement of the move down from the 2011 high at the 1.3148 level yesterday, and later moved below trend line support and back into the up-channel (see charte below and comments from yesterday CLICK HERE). Today the wander lower continued. Worries about Spanish debt (3 and 10 year auctions are scheduled on Thursday) and a weaker German Zew Survey (12.6 vs 18e) have taken some of the sting out of the dollar selling and put focus back on the EURo (CORRECTION: The German Zew Economic Sentiment Index improved to -18.2 from -25.5 last month and -20e. What declined was the Current Situation component which showed a contraction to 12.6 from 18.2 last month and 18e).
The price is currently moving toward what should be key trend line support and 100 hour MA (blue line) at the 1.0325 level (see chart below). The low has come in at 1.3046 for the day (see chart below). There should be support buyers against this area on the first test. A break below will be more indication that the correction to the downside should have more to go as sellers win back some control from the September buyers. The 1.3000 level was barrier resistance on the move to the upside on September 13th and will be likely be remembered on a move down.
On the topside currently, the price is below a low correction level from Friday (at 1.30793 and the low from yesterday at 1.3083. 1.3083 is the midpoint of the days range as well). This will be eyed as close topside resistance for the sellers today. If the price is to complete the rotation down toward the 100 hour MA test, I would expect to see sellers against this level this morning. A move above and traders could switch the bias back to the upside with the 1.3100 and 1.3115 close from yesterday the next targets.
The low to high trading range is 77 pips vs 105 pips for the 20 day average. There is room for another 20-30 pip extension and a normal day from that perspective. The way the NY start is going it might be a slow process.
The US Current Account is due to be released at 8:30 AM ET (-125.0B for 2Q – old news) and Total Net Long TIC flow at 9 AM +27.5 B vs 9.3 B (not a big mover usually). Both are not typically market movers. So the momentum lower might be contigent on simply the the gravity of the market bias today. S&P is down 1.7. DJ Futures are down 17 points and Nasdaq down 1.
