EURUSD bounces just ahead of the 38.2% target at 1.08394. What now?

The EURUSD trended lower after tries above the 200-hour MA earlier in the session and yesterday could not sustain upside momentum.Buyers turned to sellers.

The move lower took the price from near 1.0900 to a low today of 1.0843. That low got within 4 pip of the key 38.2% retracement. After a trend move higher like was seen from the June low, getting below shows the sellers are committed and “mean business” Absent that, and the move is just a “plain vanilla” variety.

With the support holding, the focus shifts to what would increase the confidence of the buyers against the 38.2% retracement?

Looking at the below chart, the swing area (see red numbered circles) would need to be broken and stay broken.

So the dip buyers did their thing and stalled the fall, but there is work to do to give those buyers some added confidence. Absent that, look for a run below the 38.2% on the next leg lower.

This article was written by Greg Michalowski at www.forexlive.com.