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EURUSD bounces back higher on Powell comments

  • The 38.2% and swing area between 0.9899 to 0.9913 stalled the corrective rally
EURUSD corrects back to swing area.

The EURUSD has moved back above the swing low from September 6 at 0.98633. Also moved above the swing area between 0.9874 and 0.9877. Those levels represented the swing lows from September 5 and September 7 book ending the September 6 old low. That area is now reestablished as support in the short-term. If the buyers can stay above that level, the break to the low will look somewhat exhaustive at least in the short-term.

Having said that, the retracement back higher has seen the price move to the 38.2% retracement of the move down from the week's high down to the low price reached today near 0.99028. That retracement level is also between a swing area between 0.9899 and 0.9813.

Technically getting above the 38.2% retracement and the 0.9913 level is the next hurdle to get to and through. Above that is the 50% midpoint of the move down this week and 0.99309, and above that is the 0.99515 level which I've earmarked as a level of importance. That level held support (for the most part) over the previous 5 trading days before breaking lower today on the back of the Russian news. Remember the 0.99515 level was the July 14 old low for the year and started a corrective move to the upside at that time.

Getting back above 0.99515 would certainly start to increase the bias in the short-term even more.

For now, the correction is to the 38.2% retracement. There is work to do if the buyers are to take more control, but there is also reestablish support at old lows that traders can lean against.

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