The EURUSD started the day with volatile up-and-down price action. The price was trading above and below 100/200 hour MAs indicative of uncertainty from buyers and sellers. IN the morning video, I talked about this dynamic. I gave the small nod to the buyers on the back of higher lows, the price was above the 100/200 hour MAs at the time.
See video HERE.
So what happened?
The pair moved lower early on and below the 100/200 hour MAs, but held above the European morning low. The price rebounded and a final move above the MAs convincing the buyers to push higher.
The extension higher ultimately saw the EURUSD pair move up to test a swing area defined by swing highs going back to August 23 to August 27. Last week, that same area was revisited. That area comes between 1.1181 and 1.11897.
Sellers leaned on the first test of the upper extreme from the swing area at the 1.11897 level. The price has moved modestly lower since then. Sellers have helped stall the rise, but not by much.
What now?
Traders are now wondering if the run to the swing area will lead to a rotation back to the downside (like the recent pattern) or will this be the one, that breaks higher and ultimately runs to the upside?
The good news is traders can use the 1.11897 as a risk, and bias defining level. If you are a buyer, but tired of getting whipped around, you can sell with a stop on a break above 1.11897. The next target is 1.1200 followed by the high from yesterday. .
If a bear, sell here and hope the price moves back below close support at 1.1166 and then to the 100 and 200 hour MAs at 1.11487 and 1.11413 respectively.
Getting and staying below those MAs and staying below is needed to increase the bearish bias once again.
Buyers are winning, but can you trust the run higher?. Get and stay above 1.11897 would give the buyers more confidence. . .
This article was written by Greg Michalowski at www.forexlive.com.
