This time from ISM Non Mfg Composite. Yikes..
The EURUSD was looking to break further down but a weaker ISM non-Mfg composite index has saved the day (for the buyers that is) and the pair shot back higher. The move has taken the price back to toward the 1.0863 level. The level was near swing lows during the May to August time period (see daily chart below). The high just reached 1.0868.
Folks, the market was surprised with the ECB today and the shorts that have been accumulating in the pair has sent the pair racing back to the upside (see commitment of traders report for the EUR below).
Is 1.0863 high enough for the sellers to line up again? I don't know. What I do know is the level can be leaned against if traders are so inclined to be short. If the traders are to look for a top, this would be a level to lean against to define and limit risk.
Now, if the shorts are still caught - and they start feeling more pained especially going into the NFP report tomorrow - that level will give way and then we start talking about 1.0900 and after that, 1.1016 (50% of the move down from the October high). The 100 and 200 day MAs come in at 1.1025 and 1.1058 respectively. All are just a stones throw away if the shorts continue to get squeezed.
So far, the 1.0863 area is holding the line. Support back at the 1.0790-1.0807 now.
