The EURUSD is trading to a new session low and in the process has reached the next target area between 1.09618 and 1.09759 (see red numbered circles on the chart above). Today, the move to the downside started against the 200-hour moving average (green line in the chart above). Sellers leaned against that level at session highs today and were rewarded when the US data came out stronger than expected.
The price then fell below the 100-hour moving average (blue line) and 50% retracement level (at 1.10539).
A swing area between 1.1010 and 1.10267 was then broken. Note how the corrective high after the break stalled against the 1.10102 level keeping the sellers firmly in control.
What next?
If support bars leaned against this swing area (and it is somewhat important as it represented a ceiling going back to June and early July) traders will watch for corrective highs to find resistance near 1.1010 and certainly not above 1.10267.
If 1.09618 is broken, the next target would be near 1.0932 followed by the 100-day moving average of 1.0900.
The move to the downside in the EURUSD is being helped by the tumbling EURJPY as well. The chatter is that the BOJ will adjust it yield curve control policy when they announce its interest rate decision in the new trading day. That talk has set the USDJPY sharply to the downside and also the JPY cross currency pairs (like the EURJPY).
Looking at its 4-hour chart of the EURJPY below, the price of the pair has broken below the 38.2% retracement of the trend move up from the May 2022 low. That level comes in at 153.492. That retracement level is within a swing area between 153.34 and 153.985. It would take a move back into that area to hurt that bearish bias going forward.
The next key target comes against the 50% retracement of that same move lower. Move below that level and it opens the door for further downside momentum.
THe EURJPY 100-day moving average is down at 149.748. The price of the EURJPY has not traded below its 100-day moving average since March 29. Is that what traders will be focused on now? IF the BOJ acts, that target will be eyed.
