EURUSD squeezes higher.
The EURUSD continues the squeeze higher as some of the worry about the Greek situation permeates into the market. There is a rumor of a German owned back providing relief. This, coupled with Friday squaring, has the EURUSD the currency of choice – to the upside.
With the market now above the 100 and 200 hour MA, where can the pair go? If the price is able to hold above support levels like the 1.3627 level and the 200 hour MA at the 1.3588 level, the price does have the potential to extend toward the 1.3800 level and then the 1.3878 level. The 1.3800 level is the 50% midpoint of the 2009 trading range (see chart below). The 1.5878 level is the 38.2% retracement of the move down from the 2010 high of 1.4579 (see chart above).
When the market turns the potential can take traders by surprise. However, the EURUSD has moved down over 1100 pips since January and a simple correction of 300-400 pips is not out of the question. It is important to follow the technicals as nothing is guaranteed. So the price and key levels like moving averages will tell the story. That story started yesterday when the price showed signs of bottoming and today, the stories chapters are unwinding further (see prior post from yesterday and watch the Rebroadcast of the webinar).
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