On the downside, traders will be watching the low of the swing area near 1.25987 as close support.
Buyers are making a play into resistance. You have to go through resistance to get extend higher, but it may also slow the rally or bring in traders against that area, with a stop above (risk is limited).
Looking at the hourly chart, the price action was very volatile today with the initial move to the upside leading to a sharper move to the downside and then a snapback rally back higher.
So what now?
In addition to support at 1.25987 from the daily chart, the swing high from last Friday at 1.25829 and the 38.2% retracement of the move up from this week’s low at 1.25689 are the downside targets.
This article was written by Greg Michalowski at www.forexlive.com.