Broken trend line holds
As per the earlier post, the EURUSD had some trouble at the highs. The price was able to get above the 1.22826-961 ceiling area (see yellow area), but that break quickly failed.
The corrective move lower tested the underside of the broken trend line at 1.2267 and held. That is good news for the buyers, but the ceiling remains. The battle was on.
What now?
The price is back up retesting the 1.2296 level. Traders will be watching to see if that level is broken (again). On a break, the 1.23227 will be the next key target. Get above that level, and there is more open road.
If the yellow ceiling area does hold, and the price goes back below the 1.22826, I would expect the buyers to give up and look to sell.
Remember, on Thursday the ECB will keep rates unchanged, but ECB President Draghi will have to weave a story that will slow the rise in the EURUSD down, but give credit to the recovery at the same time.
The EURUSD is up from 1.0339 at the beginning of 2017 and up from a low of 1.1552 in November 2017.
Is Draghi comfortable with that? Can the region keep the economic momentum going with a rising EURUSD?
My gut says Draghi will do his best to try and slow the rise.
Technically speaking, key level being tested now....with risk defined and risk limited.
