The high today holds near the old ceiling of the swing
EURUSD this week swung above a ceiling area at 1.21435 and 1.21496 during Tuesday’s trade on its way to the week’s high at 1.21690. This breakout (see red numbered circles) could not be sustained, however, and the price began to drop below its 100-hour moving average (blue line) and 200-hour moving average (during the Wednesday trading).
The week’s low continued below the 50% retracement level at 1.20603 and a swing zone between 1.20493 and 1.20579 (also Wednesday). The low price hit 1.20226 before rebounding higher on Thursday (based on the 61.8% retracement).
The rise during yesterday’s trade saw the price move back above the 50% retracement level. Before going higher, traders retested this midpoint over a number of swing lows, found willing buyers and it was the technical clue to move higher.
Today the return to the 100 hour moving average was initially tested in the Asian session and stalled the rally. However, this line and the 200 hour moving average (green line) were later broken as the European session entered, and the pair boomed higher to stall near the former high swing zone between 1, 21435 and 1.21496 (see red numbered circles).
Old ceilings, which are broken, may tend to recover as ceilings during retests. This is what happened today and traders will likely continue to use this area (up to 1.21496) as a level to sell / lean against with breaks on a break above.
If the price maintains resistance (stays below), a downward spin towards the moving averages (and the 1.2100 level) would be considered support. If buyers are to stay in control (they battled sellers earlier in the week) staying above the MA would be considered.
If 1.21496 is broken, however, look for a retest of the week’s highs.