The EURUSD is trading at the day’s low and is looking to test the 1.3585 level. This was a support low level going back to May 29th (see chart above).

On the ECB interest rate decision day last week (Thursday), the price tumbled below this level on its way to a test of the 38.2% retracement of the move up from the July 9 low to the May 8 high. That level comes in at 1.35207 (see chart above). The test failed and the price rallied sharply to the upside – moving above and closing above 1.3585 level and then the 200 day moving average (green line in the chart above). That turned the bias to the upside.

Today the story is a bit different, however,  as the price has dipped back below the 200 day moving average and continues the directional trend in early NY trading.

The low to high trading range for the day is 75 pips so far. The average over the last 22 trading days is 65 pips. For a Monday, this is pretty good – at least from recent history. With the above average trading range I would expect that the 1.3585 level should attract some buying interest on the 1st test. If there is a break, there should be some stops triggered and traders would look for momentum. The 1.3585 level should then become a resistance area.

Key test for the downside.

 

———————————————————————————————————————–
All information on this site is provided for informational and educational purposes only. Information provided is not to be misconstrued as trading advice. Past results are not indicative of future results. In addition trading in foreign exchange markets on margin carries a high level of risk, and may not be suitable for all individuals.The post is intended for clients and traders outside the US.