EURUSD moves down overnight but rebounds
The EURUSD had a late sharp move down at the start of the new trading day, moving through the next target support level at the 1.3974 level, on its way to the 61.8% retracement support at the 1.3921 (low reached 1.3928 - see chart above). The market started to rebound from the key technical support level. EUROZONE PMI Services came out at 44.7, slightly higher than expectations at 44.5, but Retail Sales for the region fell by a greater than expected -0.4% for the month. Later some rumblings about Russia’s interest in discussing reserve currency ideas at the next G8 summit next week, reminded the market about that risk and helped the dollar bear sentiment.
The pair corrected up toward the 200 hour moving average at the 1.4035 level (high reached 1.4027). The moving average contained the upside moves in the NY session yesterday as well. Currently, the moving average is at the 1.4039 level (see green line in chart above).
On the shorter term 5 minute chart, the EURUSD is consolidating and moving sideways. The 100 and 200 bar moving averages have leveled off and market activity is taking the price above and below the levels. The 100 bar moving average currently comes in at the 1.3999 level, while the 200 bar moving average (green line in chart below) comes in at the 1.3987 level. NY is largely off today to celebrate July 4th, but London and Europe will be around to 11-12. There are no economic releases, but position squaring can make the action choppy.
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