EURUSD moved higher in early US trading and as it re-entered the “red zone” (see chart below), this was the area of value until yesterday’s breakout lower (between 1.0886 and 1.0973). The price is currently testing the low swing area within this Red Box between 1.0886 and 1.0896. Recall that from yesterday, the price corrected back to this area and found willing sellers at 1.0896 before turning back to the downside.
In today’s trading, EURUSD continued to lower below the next target area at 1.0842 – 1.0848. The low hit 1.0833, about 10 pips from the 50% midpoint of the move up from the May 31 low at 1.08229 and the rising 100-day moving average at 1.0819.
When is the next time?
Break above 1.0896 and traders are looking at the declining 100 and 200 moving averages at 1.09120 and 1.09218. Move above it and a door will open for a rotation towards the top of the Red Field.
The market this morning passed the Core PCE data without worse and expectations. While that’s 4.6% versus expectations of 4.7%, it’s still well above the 2% target officials are looking at. Still, the dollar is moving lower after the easing. US stocks are also higher, with the NASDAQ now up 139 points and the Dow Industrial Average up 181 points.