EUR/USD broke free of its narrow trading range since the past week yesterday
The move lower came as price broke free of downside support at the 38.2 retracement level @ 1.1165 but then sellers couldn’t find further conviction to break below minor support around 1.1130-33 (swing region from 5 August).
Of note, sellers did make an attempt to break below the near-term trendline support but that level is still holding on somewhat as price has moved back higher.
The range today remains relatively narrow at just 19 pips, so what’s next for the pair?
The key risk event later on in the day will be the release of US data so keep an eye out on that. Not only will that have an influence on the dollar but it potentially could have a material impact on risk sentiment today.
As such, the technical levels are still helpful in this instance to determine any further bias.
For a further downside move, price has to move back below the 50.0 retracement level, the broken near-term trendline support and the swing region around 1.1130-33. I reckon a break of those levels will see a convincing argument for a move towards 1.1100 and below.
Meanwhile, the risk for sellers now is if price starts to move back to challenge the key hourly moving averages around 1.1185-92. For buyers, a break above those levels will be a good spot to try and build momentum to test the upside again.
Key resistance levels rest at the near-term trendline resistance at 1.1206 currently as well as the 100-day moving average at 1.1222. In particular, if buyers can chase a move and hold a break above the latter, the upside run may start to gather some legs.