The 1.18495 to 1.1861 is topside resistance
The EURUSD fell below some key technical targets yesterday starting with the 200 hour MA and 61.8% of the move up from the August 27 low. That level comes in at 1.18566 yesterday. Today the 200 hour MA is at 1.1861. The 61.8% is at 1.18566.
The price also fell below swing highs from August 24 and August 27 at 1.18495.
The price fall below that area took the price into a consolidation area going back to August 21 on the hourly chart. Most of that trading took place between 1.1779 to 1.18495 before breaking higher on August 28th.
That “value area” is where the price is now.
The low today reached down to 1,17883 – 4 or so pips above the lower value area. We currently trade at 1.1834 – below the higher value area.
Buyers and sellers have returned to the up and down area and are trading up and down.
Pay attention to the extremes. On the topside, I would expect sellers in the 1.18495 to 1.1861 area. On the downside watch the 1.1779 to 1.17837.
Breaks out of those ranges should tilt the bias more in the direction of the break.
In the back of my mind is the speculative long position in the currency futures. Last week the longs in the EUR increased by 14,800 to 211,752 which is near record levels. Is there some additional profit-taking after the 1.2000 level found sellers? Or, is the 220 pip decline from the high enough (from high to the low)?
Taking a broader look at the daily chart below, the low price today did find support against day trend line connecting recent lows over the last month of trading. The high of this week tested the topside channel trendline. So there is a coiling going on near highs for the EURUSD, but the pair remains within the upside channel range. At some point there will be a break one way the other in the big picture.