Patience. Don't panic. There will always be another trade.
The weekend risk was huge. Solution or no solution was the Friday thoughts. Each would have likely sent the EURUSD gapping one way or another. We ended up getting a hybrid with a referendum vote, and that has been worth a move down from 1.1165 close to a low today of 1.0953. The high today has taken the price to 1.10145 so far..
Looking at the daily chart below, the price has been able to extend below the 50% of the move up from the March low at 1.04617 to the high from May at 1.14658. That level comes in at 1.09638. This remains a key level to get below - and satay below if the bears are to extend the range further.
Above, there a slew of old swing lows and highs at 1.1032 to 1.1065. The 100 day MA is at 1.1049 (key level). I would expect that sellers will lean against the 1.1032-49 area as a risk defining level in trading today. It would seem to me that the 100 day MA should be a key "line in the sand" for the pair from a technical perspective. We should not trade above this level.
I would expect that there is likely to be a lot of traders looking for rallies to be sold. However, that does not mean there cannot be some bouts of short covering. The Fed might be less inclined to ease now and that could neutralize the market a bit. However, I will expect that if the price starts to sniff the aforementioned levels - especially the 100 day MA level - I think that traders who can define risk and limit their risk against that level, will be happy to do so.
Where can the EURUSD go? With a few looks below the 50% at the 1..09638 already today, that will continue to be a level to get - and stay below. Below that the 1.0845 is the 61.8%. There are other swing lows at 1.0818 and 1.0862-66.
Although it seems the bias is down. The trade is bearish. However, it does not mean that there is not risk. Be patient. Make sure your fear is under control. If the too great, don't trader or lower position size. There will always be another trade.
