EUR/USD Continues Downward Move; Key Support Eyed

The EURUSD has continued its move down today.  The weaker US/global stock market, the GM/auto bankruptcy threat, has the market worried about the negatives in the economy rather than the potential positives due to lower interest rates and fiscal stimulus packages.   This has led to a flight back into the US dollar.

From a technical perspective, the price on Friday tested the 38.2% retracement level of the move up from the march 4th low of 1.2456 to the high of 1.3738 on March 19th.  That level came in at 1.3248.  The low on Friday was 1.3256 (see chart above).

Today, the price gapped lower on the opening, moved back above the key 1.3248 line.  The level was then tested on 7 different occasion on the 5  minute chart before the price moved back below (see chart directly above). The break back below the 1.3248 level, sealed the downside and the momentum/volume  increased.

Longer term, the price is approaching key support at the 1.3092 to 1.3097 level where the 100 day MA and the 50% retracement level is located.   The low today at 1.3158 has support as well (100 bar ma on the 4 hour chart).  On the topside, the market has been following the 100 hour MA on the 5 minute chart.  The current level comes in a the 1.3196 level.  The last high reached 1.3204.  A move above 1.3204 should solicit some profit takers off the lows.  If the price can remain below, however, the downside bias to the downside remains.

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