Trading with a bearish bias but not in a hurry
The EURUSD corrected higher today after bouncing off the lows from yesterday in Asian-Pacific trading. The peak - reached in the European morning session - extended right to the top of the ceiling (well it broke that level by a pip and a half) at the 1.0683-905 area. That area was defined by the swing lows on Nov 12 and Nov 16, broken and held on November 17th.
That holding keeps the sellers more in control. From the perspective of the hourly chart, the buyers are winning a few battles today - double bottom, extending above the trend line - but the overall war is still in the shorts/sellers court below that resistance ceiling above (and also up to the 100 hour MA above - blue line at 1.0710).
Looking at the 5 minute chart below, the pair started to lose the downside momentum going into the Asian Pacific session. The price moved above and then held support against the 100 and 200 bar moving averages (blue and green line in the chart below). Surged higher to the resistance area at the 1.0683-90 area, and has now corrected toward the days midpoint and the rising 100 bar MA. This MA - along with the 200 bar MA below - is what shorts are looking to break in order to take some of the pressure off the corrective action today. Move below and stay below and the sellers feel better/more comfortable.
As mentioned on Monday:
"There will be a lot said and "thoughts" shared on Fed policy, ECB policy, implications to the global economy from the terrorist activity, etc over the near term. There will be actions and reactions by governments. There may continued terrorist activity. Who knows? The fact is we don't know.
That means to me that overall risk is increased - market risk which is the price risk we face every day, and also event risk and liquidity risk. When risk is increased, is it a great time to trade? No. So trade cautiously. Be patient for extremes. Define your risk. Look to take profit when you have it and limit losses. Take partial profit and get a "free trade" on the balance. Those are thoughts you should focus on."