The EURUSD moved down to test the support area near the 0.99515 level. I have been speaking to that level since last week.
Recall the level corresponds with the low from July 14 (not shown). That was the stall of the trend move down at the time.
In August and early September the price traded above and below the 0.99515 level but started to reestablish a floor near the level last week (on September 14). On Friday, the pair dipped below the level only to bounce back quickly and return back to the high resistance near 1.0035 a short time later.
Today, the Asian session high, broke above that swing high, but like the break lower on Friday, the price quickly failed. Also, like Friday, the failure sent the pair to the opposite extreme (i.e. the 0.99515 level). Buyers have pushed the price back higher and toward the broken 100 hour MA at 0.9995.
So the dynamics remain the same.
- Move below 0.99515 and stay below is more bearish.
- Move above 1.0035 and stay above is more bullish.
- Be on the lookout for failed breaks although as time goes by, there will be a catalyst for a break and run.
Fundamentally, the inflation reading out of Germany was shocking today (+7.9% for the month). That is not good for the economy and the EURUSD moved lower. With inflation so high and the Fed tightening with low unemployment, it should keep the EURUSD under pressure. However that could keep inflation higher in Europe too. It is a mess.
Stocks remain under pressure with the Dow -392 points or -1.26%. The S&P is donwn -1.27% and the Nasdaq is down -0.96%. The 2 year is steady just below 4% at 3.975%. The 10 year is also steady but up at 3.585% or +9.3 basis points.