EURUSD breaks below the range. Moves toward target support
In last night’s Video Commentary (CLICK HERE), the EURUSD consolidation was broken into three parts. The levels each had support and resistance defined by highs and lows from the hourly chart over the last 6 days (see chart above). Clearly the market was consolidating and moving from one level to the next. The top level (1) and bottom level (3) had the least amount of bars – the belly or middle area was where most of the trading took place.
At the close yesterday, the price moved back into the middle area. The price moved up toward the top area, but fell short of the top level resistance at the 1.3621 level (high of 1.3591). The market started to fall.
When the price moved through the 1.3516 level, the price remained pressured lower. The pair then moved through the key 1.3418 low level, reaching an initial low on stops down to the 1.3366 level, the price rebounded sharply, but fell again to the days low of 1.3293.
The break into new territory outside the consolidation area, now targets the 38.2% retracement of the move up from the February low of 1.2456 to the March 19th high of 1.3738. That level comes in at the 1.3248 level (see chart below). The low today is currently 1.3293.
On the upside a break back above the initial low at 1.3366 would signal that a temporary bottom is in place. A move back above the 1.3418 would be confirmation of that bottom and should bring the consolidation area back into the focus for the time being.
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