Back above MAs and trend lineThe EURUSD has stepped a bit higher today and in the process were able to take out some technical levels. That gave a more bullish bias for the pair.
Included in its bullish journey, the pair has been able to move above the 100 hour MA (blue line), a trend line starting at the Feb 16 swing high and eventually the 200 hour MA (green line). The 200 hour MA initially stalled the rally on the first test, but after the correction off that level stalled near the 100 hour MA, the pair moved above the 200 hour MA and the bullish run gathered some momentum.
The move higher has moved the pair above the 38.2% of the move down from the Feb 16th high at 1.23068 and the pair has been waffling around the level. The bulls are more in control with the breaks today, and the range for the day is still somewhat contained at 73 or so pips.
So if the buyers can stay above the 200 hour MA (that must not be broken on the downside — closer risk might be to stay above 1.2300 ), the pair can make a run toward the next target area at 1.2352-62 (topside yellow area in the chart above). That is home to a number of swing levels, the high for the week, and the 50% of the move down. I would expect sellers to start showing up as the area is approached.
The Italian election over the weekend is a potential negative. The stock market is a wild card as well. The EURUSD has been bought as the stocks declined yesterday. The S&P futures are down about -19 points now and the Dow is down -240 points.