Forex technical analysis: EURUSD having it's ups and downs
Pick your spots....
The EURUSD last week went down and tested support at the 1.0500 area. The low reached 1.0495 on Thursday - could not move lower - and surged higher on Friday.
Today, the price shot up to a high of 1.06395. That move usurped the swing highs from Feb 20, 27 and 28th. They all came in at 1.06295-1.06324. The price should have gone higher. It did not. Failed break (see video on FAKE BREAKS on our YouTube channel on how to trade them).
The most logical target on the downside would be the 100 bar MA on the 4-hour chart and the 38.2% retracement. Those levels came in at the 1.0584-86 area. They were broken on the way to a low of 1.0576 and that break failed. Another failure!
It is not all that easy with failures especially if you are playing the breaks at the extremes and getting out too quickly. On the other hand, if you are playing failures, you are doing ok.
Anyway, those lower and higher levels are the closest support resistance levels for traders today. Can we extend below and above either of them? Yes. the range for the day is 63 pips. The average is 74 pips for the pair (22 days which is about a month).
On the downside, the 100 and 200 hour MAs come in at 1.0556-63. That would be an outer extreme today that should attract decent buying.
On the topside the 200 hour MA on the 4-hour chart comes in at 1.0650 and the 100 day MA comes in at 1.0677. A move to the 1.0650 level should solicit sellers.
For me, it can go either way, but if those outer extremes are tested, I would expect patient traders to step in.