The low last week tested the December low of 1.0723 and buyers held their ground. Since then, price action has been a bit more muted though. The 100-day moving average (red line) has kept a lid on any upside move while the floor remains at the December low. It shows that traders are respecting the key technical channels in play – at least for now.
Considering that we have the US CPI data tomorrow, the movement today is likely to be fairly muted as well. Barring any surprise headlines, traders will be waiting on the inflation numbers tomorrow before chasing any major moves.
And depending on the numbers, we could get some decent technical moves to work with potentially. A break above the 100-day moving average and 1.0800 will see the 200-day moving average (blue line) at around 1.0830 get called into question. Meanwhile, a break below the December low of 1.0723 will likely lead to further downside momentum as the squeeze lower this year continues.
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