The EURUSD moved back down to the 1.1876 post-2008 crisis low as NY traders entered for the trading day, but has found buyers against the level on a few tests (one broke and failed, the other has bounced)
EURUSD breaks post 2008 crisis low at 1.1876 but rebounds.
In the first hour of the trading (starting at 5 PM ET), that was not the case. The pair fell to a low of 1.1861 but could not sustain the momentum on the break of this important target (low was the lowest level since March 10, 2006).
Remember in 2010 the calls for parity for the EURUSD as a result of the first Greece crisis and euro collapsing – it only got to 1.1876 before turning around (see hourly chart below).
EURUSD on hourly chart shows the sellers are in control.
The earlier corrective rally today took the price up to the 1.1975, but since London’s start, the price has been grinding back lower. German CPI data has come out a touch weaker than expectations (0.1% vs 0.2% MoM) and the market is gearing up for the next ECB shoe to drop later this month as a result of inflation moving lower and lower. So fundamentally the bias remains down for the pair.
For today, however, the 1.1876 level will be the lower boundary for the intraday traders (it is an important level). Traders looking to take some profit without risking a lot, will likely lean against the area with stops below, but until the buyers can prove that they can do something more, the sellers are in control of this market.
What might solicit more buying today and/or be level to eye for sellers?
The 38.2%-50% of the last move lower today and the 100 bar MA (blue line) on the 5 minute chart (see below) will be eyed as resistance to stay below. If the correction off the 2nd look at the 1.1876 level can hold below this area, the sellers remain in control. If not, there could be a further corrective move to the upside as traders rethink what holding 1.1876 really means from a technical perspective at least.
EURUSD on the 5 minute chart