May 11, 2022 08:51AM ET
By: AnalysisWatch
The EURUSD weakened after the higher than expected CPI data.
The price moves back towards 1.0500 but finds support at this level. There is a swing area between 1.0505 and 1.05092, which is also being tested. The low price has reached 1.05012 and bounced a bit. The current price is 1.0518.
On the downside, it is below the level of 1.0500.
The level of 1.04904 was the low of last Monday/Tuesday and again on Thursday (see red numbered circles). This week the low was 1.04945.
Last week's low was set on Friday at 1.0482, and the low for 2022 was reached on April 28 at 1.04703.
These are the steps down with further selling pressure. Below these levels, the EURUSD is trading at its lowest level since January 2017. The low for 2017—in the first week of January this year—was 1.0339. A move below this level would take the price to its lowest level since December 2002, prompting traders to target parity as the next key target.
On the upside, the downside run after the data led the price back below its converging 100- and 200-hour moving averages at 1.0543. Now, the price would need to rise back above this level to break the sellers' bias.
The hourly chart shows that the price has been moving in an up and down range since April 27. The low point is 1.04703. The high was reached last Thursday at 1.0641. This high was stopped before the 38.2% retracement of the downward movement from the April 21 high at 1.0648, so the correction was limited to a "simple variant".