200 hour MA stalled the rally above. Weaker data out of Europe today
The German factory orders fell greater than expectations at -3.7% versus 0.9% estimate. German ZEW economic sentiment also was lower at 63.3 versus 79.8 last month. EU ZEW sentiment came in at 61.2 versus 81.3 last month. All helped to contribute to a rotation back to the downside in the EURUSD during the European morning session.
Also helping were the technicals.
Looking at the hourly chart above, the price of the EURUSD initially moved higher today after basing near the 100 hour MA (blue line). However, the move to the upside ran into resistance near the 200 hour moving average (green line) and the 50% midpoint of the high to low trading range since June 18 (and the June 25 high). Those levels came in at 1.18906 and 1.18922 (at the time) for the 50% and 200 hour MA respectively. The high price for the day peaked at 1.18947 – just a few pips above that area.
The inability to move above that area with any momentum, started to turn buyers to sellers (sellers leaned against the technical levels). The weaker data helped to shove the price further to the downside, and gave the sellers the reward they looked for (with limited risk).
The fall has subsequently also cracked below the 100 hour moving average at 1.18563 currently (blue line in the chart above). The price also fell below a swing area that includes a number of swing lows and highs between 1.1844 and 1.18507 (see red numbered circles in yellow area).
The last four hourly bars has been able to stay below that area (and also the 100 hour moving average).
For traders now and in the short term, getting above those levels is needed to tilt the bias more to the upside at least on intraday basis.
Conversely, stay below and the sellers remain in firm control with the July 2 low price at 1.18065 as the obvious downside target. That level was the lowest level since April 6. The March 31 low and low for 2021 is down at 1.17035. Keep that level mind as well down the road.