The EURUSD has been inching higher moving closer to the closing level from yesterday at the 1.1932 level. The rally based near the 1.1876 which was the low from 2010. The low today came in at 1.1883 – 7 pips from that key level. Like yesterday’s London/New York session, traders seem to be leaning against the key 2010 low as a risk defining level. If that level is broken again (in the first few minutes of trading yesterday, the level was broken on a way to 1.1961), look for stops. That is the downside story from a technical perspective.
EURUSD down but recovering
What about the upside?
The push higher off the lows is being aided by weaker US data.
- Factory orders (-0.7% vs -0.5% estimate and
- ISM 56.2 vs 58.0 estimate and 59.3 last
were a disappointment.
With slower growth will come ideas that the Fed may not give the dollar a boost by raising rates – especially if oil stays lows, inflation stays low and asset prices like stocks, don’ t do too well (Dow down over 100 now). Of course in the greenbacks favor is the ECB is beginning to panic from being behind the curve so rallies should be limited. Plus if US does bad, how bad will it get in the EU?
Technically on the topside, the rally off the low is showing some small bullish clues. The price is above the 100 bar MA (blue line in the chart above) but is having trouble extending above the 200 bar MA (green line). In addition, the close from from yesterday comes in at 1.19319 and the NY session high comes in at 1.1932.
The 1.1876 level (low from 2010) may be holding the line below but getting above the 200 bar MA and the close from yesterday are still hurdles that have yet to be conquered.
Get above, and the pair has potential for further gains. The 1.1976 to 1.1999 is a gap from Friday’s low to the post 5 PM ET opening from Monday’s trading (this is the one I focus on) . That will be a target. The high today came in at 1..9679 before reversing lower.