The EURUSD moved to a another new low going back to 2002 yesterday when the price bottomed at 1.01607 (see monthly chart above). In the process, the price is getting closer to the parity level of 1.000 level in the major currency pair as investors ponder how bad the recession will be in Europe. The move lower this week took out the swing lows from the 1st week of January 2017 near 1.03390. That level was broken on Tuesday and moved to 1.0234 area. Yesterday's move lower continued the decline to the new low for the year and lows since 2002.
After reaching into extreme near multi-decade low levels, traders have to respect the trend and and that is to the downside. Moreover - and probably more important - is the buyers need to prove that they can take back control and keep control. Absent that, and the buyers are not winning.
Looking at the hourly chart below, the price did rebound in the Asian session, but could not extend to the low from Tuesday's trade at 1.02344.
Are the buyers winning? No.
The high price today has reached 1.02204, well short of the low price from Tuesday's trade at 1.02344. On the hourly chart, getting above the Tuesday swing low would be needed to increase buyers confidence. Absent that and the sellers are still in control.
Drilling further to the 5 minute chart below, the correction off the low did move above the 100/200 bar MAs in the Asian session which did give the buyers some hope. However, the high price today did stall near the 50% of the move down from yesterday's high (at 1.02183), has traded up and down since then, but is making a new low for the day as I type at 1.0168.
The price is also back below the 200 and 100 bar moving averages at 1.0192 and 1.0197 (green and blue lines in the chart below). In the short-term, getting above those moving averages will now be the closest hurdle if the buyers are to start to take back more short-term control on an intraday basis. It would be a start.
Trading near lows level since 2002 shows the sellers are in firm control. Until the buyers can show that they can take back some control, the trend remains a friend in favor of the downside.
