EURUSD dips to a new year low (and 16 month low). Bounces
Price moves below the July 10 low briefly at 1.12540. New low to July 6, 2020 now
The EURUSD has been making new lows going back to July 10 since moving below 1.1300 (the July 13 low). Now with a push to a new year low today to 1.12488, the pair has now traded to the lowest level since July 6 (1.1239 is that low).
Although the price made a new low, the price has rebounded and currently trades at 1.1288. That is near the 61.8% retracement of the move up from the 2020 low to the January 2021 high at 1.12876.
Drilling to the hourly chart, the price low for the week prior to today was on Wednesday at 1.12633. The price quickly rebounded off of that low and continue the rally on Thursday reaching the 100 hour moving average (falling blue line currently at 1.13433). The price did close above the 100 hour moving average for the first time since November 9. However in the Asian session, the price started to dip back below the level, and continued the fall in the European session on Covid concerns, lower rates, lockdown in Austria which all weighed on the currency.
It’s hard to pick bottoms (the SELLERS are in control – the price has moved 440 pips since October 28), but if the price can get and stay above the 1.12876 level, there is hope for a corrective rally into the weekend. However, traders should be aware that they are swimming against the tide. Absent a momentum move above that retracement level at 1.12876, and the buyers are simply not winning. The sellers are still in firm control.
Nevertheless on further upside momentum, getting above the 1.1300 level would have traders thinking in terms of making a run toward the falling 100 hour moving average. That moving average is still up at 1.13433 (and moving lower). So it seems a stretch from here. However it is Friday and who knows how the wind will blow after the move lower this week, and the moving average is coming down fairly quickly.
FYI the EURUSD close last week at 1.1442.
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