EURUSD down for the 4th day in a row | Forexlive

The EURUSD has taken big steps lower over the last 4 trading days. From the high reached last Thurday, the pair has moved from a high of 1.1031 to a low today of 1.0679 for a move of 352 pips or 3.2% over that time period.

In the process, the pair has seen what were three consolidation areas retraced (see red boxes in the chart above). Those areas consolidated the EURUSD in an up and down range lower extended days.

Last week, the price broke out of the highest “Red Box” range above 1.09286 (see chart above), and quickly spiked up to the high at 1.10308.

However on Thursday, the pair rotated back to the downside after the ECB rate hike failed to convince traders that Lagarde/ECB was serious about policy hike going forward.

That move lower took the price back down toward the 100 and 200 hour moving averages (blue and green lines). Then on Friday, the US jobs report (+517K and and unemployment rate of 3.4%) shifted focus back on the US dollar moving higher.

Yesterday, the selling continued with the price moving down through the second “Red Box” (with a low at 1.0760) and through the 50% midpoint of the 2023 trading range of 1.07558. That move lower took the pair to the bottom of the third “Red Box” near 1.07115. The steps continued to the downside.

In trading today, the high to low trading range has been lower than the previous three days (is momentum fading? Maybe), but after trying to push back higher toward the 50% midpoint at 1.07558 and falling short of that level (the high price reach 1.0743), the pair has broken below the low of the last swing area at 1.07115, and also the 61.8% retracement of the 2023 trading range 1.06909.

What next?

The price is trading back above and below the 61.8% retracement. If more momentum above the retracement level can be sustained, traders will start to refocus on the 1.0711 through 1.0724 as the next area that would need to be re-broken to the upside. Failure to do that would keep the sellers firmly in control.

Conversely more downside momentum would have traders targeting 1.06579 and 1.06342 (prior swing low levels), ahead of another swing area between 1.0580 and 1.05943.

Sellers have been pushing. Momentum to the downside may be slowing, but unless the 1.0711 – 1.0724 can be rebroken to the upside, the sellers are still more in control.