The EURUSD has erased all the declines and trades to a new session high. The price back above the 1.0100 level after briefly trading below the parity level at 1.0000 after the CPI data. The high price just reached 1.0115.
Technically, the price has also moved above its falling 100 hour moving average at 1.00954. That is the 1st break above the moving average since June 28. Admittedly, the moving average is much lower as a result of the trend move to the downside since the high on June 27. Nevertheless the technical tilt is to the upside on the break. Traders will be watching that level for short-term clues. Stay above is more bullish. Conversely , move back below and traders may look toward the 1.00705 area as support.
Can the buyers keep the momentum going?
If so, the 1.0134 – 1.01433 swing area from July 7, July 8, and July 11 would be targeted followed by the swing highs from July 8 at 1.01908. Above that and the falling 200 hour moving average 1.02107 would give buyers more confidence.
Like the 100 hour moving average the price has not traded above its 200 hour moving average since June 28
The yield curve has seen a shift into negative territory since the CPI report as the expectations for tighter Fed policy also leads to the idea that a recession is more likely. That may help to weaken that the dollar going forward. However, the technicals will still need to support the market ideas. Stay above the 100 hour moving average and above the 1.0070 level would keep the buyers in play in the short-term. Getting to upside targets are also important for a corrective move scenario.
