The EURUSD has tried a little of the upside. It has tried a little of the downside. Both have disappointed, but what many traders are hoping for from the inaction, is for the action to restart.
Yesterday, the pair moved to new highs going back to ECB day. The sellers entered (or maybe better, the buyers gave up). In trading in early Europe today, the punters took a clue from the support buyers yesterday against the 100 hour MA (blue line) and bought against the level. The EURUSD moved higher and hit a new high for the day (and moved above the old trend line) but found sellers (or buyers gave up).
Needless to say, no one is getting rich with these moves. There are crumbs being grabbed. Others may be getting whipped around. Of course, the event risk is high with the FOMC and the other stuff tomorrow and that could also lead to traders waiting on the sidelines and just watching – waiting for a more opportune time to “have a go at it”.
For me, risk is at a high alert level (market, event and liquidity risk that is), so it is not time to be a hero. If you have a position, don’t bet the house. Keep the position small. My goal is not to blow up.
Having said, that be prepared for opportunities. Remain calm. Define levels of importance. If you see technical levels, other will too. I am not the only one being mesmerized by the charts, by the MA, by the trend lines, by the Fibonacci retracement levels that tend to define risk (if wrong), and targets for the trend moves (if right). What I/we see, is what others are seeing too. Use those levels to provide the roadmap for the trades, after the event risk is known (i.e., the initial headlines).
Below is what the EURUSD hourly chart is showing/telling me.
Some thoughts.
- The price over the last 4 days has spent more time above the 100 hour MA (blue line).
- Yesterday NY session and today, the price stayed above the 100 hour MA (buyers?)
- The falls below the 100 hour MA have been minimal or fairly quickly reversed (see lower red areas)
- The high yesterday was brief and quickly reversed (high red area)
- The high today off weaker CPI was also quick (high red area)
- The price action since the ECB meeting has been uninspiring (137 or so pips over 9 days). Coiling and ready for a move?
- Not shown, but the 50% of the move up from the 2012 low to the 2014 high comes in at 1.30168. This is a key level above for me on the topside today and going forward…..Stay below and this is just consolidation. Move above and stay above, makes me wonder about the downward bias I have.
- The 100 and 200 hour MA (1.2932-1.2942) represent my key line in the sand on the downside. Move and stay below it, and I would expect a march to new lows over time. with 1.2786 (61.8 of the move up from 2012 lows) as the next major target. PS. Add 1.29305. This is trend line off the weekly chart.
Between now and then….noise.
EURUSD levels I see.