Both the EURUSD and the GBPUSD saw downside corrective trading break below their respective 100 hour moving averages, only to find support buyers against the lower 200 hour moving average.
Looking at the EURUSD hourly chart below, the pair peaked yesterday at 1.07857, and could not rotate any higher in trading today.
After breaking below its 100 hour moving average in the late London morning session, selling took the price down to test the 200 hour moving average in the New York morning session. The price subsequently bounced off of that support level, and has made its way back up toward and through the 100 hour moving average at 1.07283.
The current price is trading just above that level at 1.0735.
In the new trading day the 100 hour moving average will be the barometer for buyers and sellers. Recall from last week, the price lows found support buyers against that moving average keeping the buyers firmly in control.
Can the buyers in the EURUSD reestablish the 100 hour moving average level as support and push higher in the new trading day? Or will sellers take advantage of the move back higher to sell and and continue the downside corrective probing below the 100 hour moving average with a retest of the 200 hour MA?
For the GBPUSD, it too saw sellers in the London morning session with the price extended down toward its rising 200 hour moving average currently at 1.25657 (green line). Traders leaned against the level and pushed the price back higher. The GBPUSD has been able to move back above the 100 hour moving average (blue line currently at 1.2612, but momentum faded near the London session high. The price has been trading above and below the 100 hour moving average.
Like the EURUSD, traders will use the moving average is a barometer in the new trading day. Move above and there could be a squeeze toward the highs from yesterday and on Friday near 1.2666. Conversely stay below, and a rotation back toward the 200 hour moving average would give sellers another shot at breaking below and probing more to the downside.
