Forex technical analysis: EURUSD falls from key upside resistance.
Buyers had their shot. Battle continues as support now targeted.
On Friday before the weekend, I reviewed and the EURUSD pair and spoke about what to look for this week (click here). In short, last week the sellers had their shot on the break below the 1.11609-1.1171 area. The price broke below that level (Yellow area in the chart below), but failed. Buyers took back control. Sellers had their shot.
Of course bulls stay in charge, if they can get above technical targets above. Specifially, I wrote:
"The 1.1213 area is a key upside level in the new trading week. That is where the 200 hour MA, the 100 bar MA on the 4-hour chart and 50% retracement of the move down this week is found. Get above and the bulls are happier and we move higher."
In trading, if you can't get above a key resistance area, the price goes lower. You also often find sellers against a cluster of resistance because risk can be defined and limited.
The high today found sellers at 1.1212 - just a pip short of the 1.1213 target. The price started a rotation lower. The buyers had their shot. They could not get above the key resistance. Buyers turned to sellers right there.
- Resistance is solid at 1.1213
- Support is solid at 1.11609-71 (see red circles)
There is a battle between the buyers and sellers. The sellers won the last round.
There are other levels between now including the 100 hour MA (blue line at 1.1194 currently) and the now declining 200 hour MA at 1.1205.
Generally speaking though , we ended the week and started this week with the buyers in control. They could not extend above key resistance. So the sellers took back control. Look for buyers against the 1.1161 level (between the yellow area), with stops on a break as the bulls and bears fight it out.