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Buyers have been eager to defend any downside move from testing the 100-hour MA
And it’s a similar case to the drop in the last hour or so. Price moved to a low of 1.1675 and tested a near-term trendline formed this week before moving a little higher now towards 1.1690 levels.
The 100-hour MA (red line) @ 1.1668 is yet to be properly tested on any move downwards since buyers have started gaining momentum from the middle of this month. Price has gotten near to test it but never any real follow through from sellers thus far.
That keeps the near-term bullish bias/momentum still intact but further confirmation is needed for the next leg higher to materialise and that is a move above the 1.1700 handle.
More specifically, there needs to be a firm daily break above the 1.1700 handle and more importantly, above the 38.2 retracement level @ 1.1709. Yesterday’s close was at 1.1707 but so far there hasn’t been any convincing follow through as the day’s high only reached 1.1718 – not really a sign that buyers are looking poised.
There is further resistance from the swing region around 1.1720-30 followed by the swing region at 1.1750, in which there is the 100-day MA (red line) sitting there too. These will be key areas to look out for in the session ahead to see if buyers will be able to hold on to the near-term bullish momentum in the pair.
For me, the most interesting convergence is that of the 100-day MA and the 100-hour MA. The two now sit within 81 pips of each other only and eventually, something’s gotta give for either buyers or sellers. Once the break on either side occurs, expect strong momentum for price to run away from there.
Support
– 1.1668 (100-hour MA)
– 1.1620-30 (swing region, 23.6 retracement level on H1)
– 1.1600-04 (bids, 200-hour MA)
– 1.1550 (swing region)
– 1.1530-35 (last Thursday, Friday lows)
Resistance
– 1.1709 (38.2 retracement level on D1)
– 1.1720-30 (swing region)
– 1.1750 (swing region, 100-day MA)
– 1.1790-00 (swing region, offers)
– 1.1840-50 (June highs)