Pair cracked the 200 hour MA and moved down to test the 38.2% retracement level
Today, the pair started near the 200 hour moving average, and after a modest rally in the early Asian session, the pair started to trade below the 200 hour moving average (green line currently at 130.245). Ultimately, the sellers started to push further and the price has seen a move lower through the day.
The low price did approach the swing highs from August 26, August 27 and August 31 at 129.752, but ultimately broke through that level and found support right near the 38.2% retracement of the move up from the August 20 low. That level comes in at 129.666.
The last four or so hours has seen the price remain above that retracement level, but also keep most of the decline intact. The high price reached 129.84 and currently trades at 129.75.
Getting to the 38.2% retracement is the minimum retracement level of a trend like move (which is what happened from the August 20 low to the high reached on Friday). That retracement target has been reached.
However if the sellers are to keep the pressure on, getting below that 38.2% level will now be eyed. On a break, the next downside target would be the rising 200 day moving average at 129.454 (see overlaid green line in the chart above). Move below the 200 day moving average would be another bearish step with the 50% midpoint at 129.337 as the next major target.
Conversely if the 38.2% retracement cannot be broken, the correction is a plain-vanilla variety. We can expect a rotation back to the downside.
So it sellers are in control in the short term, but they still have work to do if this move lower is more than a plain-vanilla correction. Get below the 38.2% retracement, and the door opens up for further downside momentum.