What are the levels for EURUSD and GBPUSD in the game. Are the bottoms in place?
Both GBPUSD and EURUSD achieved almost some of the main negative targets. In the case of EURUSD, the pair reached a low of 4-5 points by 2021 and has risen modestly.
In the case of GBPUSD, the pair returned from a low of 20.2% on 20 July and has also risen modestly.
For both, the questions are “Have they reached their lowest?” and “What would offer convenience to dip buyers now?”.
EURUSD: EURUSD rose to an intraday low of 1.17088. It was just below the low of 1,17035 on 31 March. Moving below this level would also lead to a 38.2% increase from the lowest level in March 2020 to the peak in January 2021.
Staying below these levels would increase the negative bias, and I would argue that it would be lower.
Of course, there is a risk for shorts / sellers that today the lowest level was close enough and there will be a rebound on the new day.
If so, traders will start looking backwards for baby steps. The first would be to reach over 200 bar MA above the 5-minute graph and stay above it (green line in the chart below). It is still close to the 50% center of downward movement today, 1.17258. Beware of both, it’s a step in the bullish direction. In its absence, buyers will NOT take back control. Sellers have a better result to go to the lowest level of the year and a repayment of 38.2%.
There is no doubt that traders relied on the first test for the level of withdrawal of ‘ordinary vanilla’.
This can lead to a reversal as traders call for an end to the sale.
Looking at the 5-minute graph, the correction for the last move was lower at 38.2%. The 100 bar MA is close to this level and the 200 bar MA is 1.3848 (green line in the diagram below). Be on top of both, and calls can be for better inquiries, as sellers are turning to buyers at least for now.