The EURUSD is in a narrow 67 pips low to high trading range so far today. The downside has been extending in early NY trade, but the move to new lows (from 1.3326 to 1.3318) was rejected and the price is now back up testing the 100 and 200 bar moving averages at the 1.3349 area. Both moving averages are converged and moving sideways, indicative of a nontrending market. I am looking for a trend like move away from these moving averages this morning. This test of the MAs is important.
If the price can remain below the moving averages, look for an extension to new lows. Conversely, a move above the moving averages, should swing the sentiment to the upside on the failure to move lower and move back above the MA resistance.
When the market non trends in a narrow trading range, like it has for the last 23 hours of trading (67 pips), no one makes money. It also says the market is unsure of the direction. Eventually however, non trending transitions into trending. Therefore, I am starting to look for the balance to turn to imbalance as the buyers or sellers take charge and start to trend the market. So it is time to anticipate a trend type move. Watch the clues from the tools and look for confirmation through target levels.
On the topside a move above the 100 and 200 bar MA would next look to get above the high from yesterday at 1.3367. Above that the high of 1.3384 will need to be breached for the upside to be opened up. On the downside, the support trendline and then the low for the day at the 1.3332 and 1.3317 respectively will be the confirming targets to break.
