The EURUSD has broken lower in NY trading – falling to the underside of the broken trend line at 1.2896 (the low reached 1.2899). The pair has extended what was a low trading range in the process. What was 40 pips as NY traders entered for the day is now up to 66 pips (which is near the month average for the pair).
Earlier in the day the pair was able to get above the 100 hour MA (blue line in the chart below – currently at 1.2932), and even make new highs for the week at 1.2962 vs 1.2958 previously. However, that move higher failed before reaching the 38.2% retracement of the last trend leg down (from before the ECB meeting last week) at the 1.29732, and the rotation back below the MA began. The low has found support against the underside of the broken trend line.
The price has since rebounded and traders seem to want to use the 100 hour MA and the low support against the broken trend line as resistance and support now. There is no discernible winner or loser from the action in the short term. However, intermediate and longer term, the shorts/sellers are still the aggressor and in charge Watch for the 100 hour MA at 1.2932 to provide the shorter term bias for the day.
EURUSD made new highs for the week but is back below the 100 hour MA at the 1.2934 level.
Another thing worth noting is the EURUSD has been confined to a 103 pip trading range this week (more than 1/2 way done). Although we have had lower trading ranges this year (around 70 pips was the low. 247 pips is the high range), the volatility has picked up in recent weeks. So this is disappointing so far (As a point of comparison the low trading range for a week in 2013 was about 103 pips – so this week is low).
The low trading range has me thinking that perhaps there is another push either to new week lows or new week highs before we ring the final bell on Friday. Watch the 100 hour MA for the clues to bias today. If the price can stay below, and ultimately get below that bottom trend line too, the door might be open for an extension lower before the week is up. With action neutral this week, I have to warn that the bias can turn higher as well on a break above the 100 hour MA.
Just my thinking…..
