Breaks 100 and 200 hour MAs
The NY afternoon session of the EURUSD has seen the price move below the 100 and 200 hour MAs (blue and green step overlay lines in the chart below). On the break there was a test and sell. So sellers showed they wanted to take control. The fall has taken the price to a low of 1.11725. The 200 day MA comes in at 1.11615. That is a key target level. I would expect that if tested this afternoon that buyers will stick a toe in the water.
Can the sellers remain in control?
One proxy would be if the price can stay below the broken moving averages. Another, closer proxy is if the 38.2-50% of the move down holds the correction. If that area can not be broken, it says to me that the sellers - who pushed the price below the 100 and 200 hour MAs - are happy to sell corrections too and keep control. It also tells me that the buyers are not proving they can take back control. That area comes between 1.1192 and 1.1198. So far, the correction has peaked at 1.1187. The sellers remain in control. The buyers are nervous.
If you are a dip buyer in the EURUSD, the 200 day MA at 1.11615 is a level to lean against. You will then need that move above the 38.2-50% and ultimately the 200 and 100 hour MA to confirm your bias.
