The EURUSD has accelerated the decline in last hour or so of trading and has made new lows in the early NY hour of trading. The pair is looking toward the 1.2131 level which is the midpoint of the move up from the 2000 EURUSD low to the 2008 EURUSD high (see chart below). There may be pre-level support up to the 1.2151 (low from the week of June 27, 2010).
The trend down today has taken a few steps down, the last being the most intense as it accelerated through bottom trend line support (see 5 minute chart above). Sellers are in control. I will be watching the corrections in the pair as a way to measure the sellers control and/or the lack of control by the buyers. Stay below the 38.2-50% of the most recent leg down keeps the sellers in firm control and the longs fearful (see yellow area in the chart above). This level comes in at 1.2192-99. The low to high trading range is still a relatively calm 79 pips. The 20 day average is 118 pips for comparison purposes. So there is room to roam still in the daily range.
The weeks trading range is up to 164 pips with the new lows. This is above the most recent low range of 146 pips (Dec 19 2010 week), and the low range for 2012 which came in at 157 pips in the March 18th week (see chart below). Putting it another way, there have only been 3 weeks which have been less than 164 pips going back to 2007. So from this perspective, should the sellers remain in control, the trend has room to roam.
In a trend, until the buyers can take back some control, they don’t have control. Control can be measured by the extent of corrections. If they cannot get above the midpoint of the last trend down, they ain’t having much luck. Watch the correction levels for clues.