Breaks below the 1.1100-09 swing lows for 2019
The EURUSD has made a break for it.
Below the lows for 2019. Those lows came in at 1.11094 from the week of April 9. During the week of May 19, the low reached 1.11064. Last week the low reached 1.11007. Each low was a touch lower than the prior one. Each one failed pretty quickly.
Today, the price moved to a new 2019 low of 1.10596 – a little more than a few pips below the prior lows. The EURUSD made a break for it…..
We currently trade at 1.1076 in early trading on Thursday.
Can the break continue?
Looking at the weekly chart, the price has been confined in 469 pip range since October 21 week (that is 9 month). That is a narrow range. So when markets break, we have to respect that break. It is only in hindsight that we will know if the break is real or a failed break (i.e. the price moves back above the 1.1109 level). But until then, I choose to R-E-S-P-E-C-T.
Looking at the price action from the 5-minute chart below you can see the RESPECT. Ignoring the first run lower (to 1.10845 – it is always going to be a bar without much liquidity), the price action took the price to the 1.11007 low and buyers leaned against that floor. Buyers were trying to stall the fall.
However, when the price fell below the floor for the 2nd time, it was more serious. You got a clue on the bounce back. When the price bounced back, it moved to 1.1102 and immediately went lower. Buyers turned to sellers. The floor was a ceiling. You can see it in the price action.
So the old floor is now a ceiling. Stay below it and the sellers are in control….It is that simple.
Where can it go?
On the daily chart, a lower trend line comes in at 1.1000 (follow the red circles).
Drilling to the hourly chart below, it’s next lower trend line comes in at 1.1135. Those are targets on those two charts if the ceiling can hold. We sit between that ceiling above and the next target below.
If the price fall is more aggresive down the road, on the weekly chart, there is a gap at the 1.0776 to 1.0820 area. That is potentially down the road.
The EURUSD made a break for it. We will see if the sellers can keep control now.