The EURUSD 's initial reaction was a dip to the downside after the retail sales report showed a greater than expected 1.0% gain. The other components of the release were also better than expectations, with mixed revisions.
The dip lower moved down to 1.0043. That was just above the 100 hour moving average 1.00382. Earlier today, the price moved above that moving average for the 2nd time this week. On Wednesday, the price extended above the level but moved back below in the next hourly bar. So far the price has closed above the 100 hour moving average for 4 consecutive bars. Buyers are making a play with the break above the moving average. Can they keep that momentum going?
What next?
There is a swing area between 1.0072 and 1.0074. Move above the 1.0074 level and traders will look toward the natural resistance at 1.1000 followed by the high price from Wednesday at 1.01215. The falling 200 hour moving average is near that level 1.01194. Clearly those levels are the next key targets that if the buyers are to take control, they need to get above those levels and stay above.
Conversely, the importance of the levels may also attract sellers on a rally. The price has not traded above its 200 hour moving average since June 28. That area represents a key barometer for both buyers and sellers going forward
So the buyers above the 100 hour moving average have been successful in holding support on the dip. Job 1 is done. However there is plenty work to be done. The 1st is to get above 1.0074. I would say the 1.0100 natural level is also a key target to get to and through followed by the 200 hour moving average and high price from Wednesday near 1.0120 as the most important hurdle if the buyers are to take more control.
Absent those moves, and a move back below the 100 hour moving average would be a great disappointment for the break buyers today.