The EURUSD moved above the trend line resistance on the daily chart at the 1.2848 level. Prior to that it pushed above the 200 day MA at the 1.2832. When resistance is broken it becomes support. The 1.2848 is now a level to eye for clues for a correction. Move below and a further move lower can be anticipated.
Is there any other clues that the top in the EURUSD may be a capitulation from a technical perspective (at least today)?
For me, the range today of 117 pips is above the 94 pips which is the 20 day average but one must remember that trends are fast, directional and have a larger trading range than normal. The 117 pips is better than average but last week on Friday the range reached 193 pips, on Wednesday it extended 123 pips, and on August 31, the range was 144 pips. Plus, the average range is down low due to the low ranges in August. So 117 is good but it may have room.
In my last post, the 1.2903 level is an important target. The high has reached 1.2870 – not quite close enough to the next key target.
Is there any other levels which may stick out and suggest a capitulation may be in place?
Looking at the 5 minute chart, the price push to the high moved above a topside trend line. The price has since moved back below the line and but tested the last high at the 1.2855 level. So far that old high has held (as has the 1.2848 level) and the price is back testing the underside of that broken trend line. There is a small battle going on for control.
Traders itching to take profit may look look at this level as a borderline to lean against. Stay below and a further rotation down and potentially through the 1.2848 and maybe the 1.2832 levels can be targeted. Move above and I would not mess with it.
When trying to pick a top in a trend like move it is important to define your risk and limit your risk. It is also important to realize that the market trended for a reason. That reason is the buyers are in control and the sellers are not. Sellers have to prove they can take back control by holding below resistance (like the underside of a broken trend line, or breaking below support which was once resistance). If the sellers cannot keep the price below resistance and then through support, are they winning back some control? Nope.