EURUSD mired in a range. Crosses weak.

The EURUSD remains mired in a narrow range for the 3rd day in a row but is up from yesterday’s close of 1.22488 (support today). This week the low to high trading range is 99 pips as we reach the midpoint of the week. If the range stands for the week, this would represent the lowest weekly trading range going back to the the July 15 2007 when the range was 90 pips (PS I don’t anticipate this to happen). The low this week is 1.22344 (reached yesterday. The level is also the low for the year). The high is 1.2333 which was also reached yesterday. The midpoint of the weeks range is 1.22839. The price is currently trading below this level. So if the range to be extended, which way are we going to extend?

Today, the Fed will release the FOMC Meeting Minutes at 2:00 PM. The Fed extended Operation Twist at the meeting. There is speculation that the minutes will show that the Fed is moving closer to more stimulus in the way of QE3. This should keep the EURUSD supported. However, trouble loom with some of the EURO crosses. Specifically, the EURGBP is at thte lowest level since November 2008 while the EURAUD is making new all time lows once again. Yesterday the pair (see chart) held bottom trend line support. Today, that support was broken at 1.1976. This is now resistance for the pair. Stay below and the bears remain in control. Stay below and the EURUSD should have a difficult time rallying strongly.

For the EURUSD, because the action is so narrowly defined, the clues will likely come from the shorter term chart. The price is currently testing the 100 and 200 bar MA on 5 minute chart. Trend line support also comes in at the 200 bar MA level of 1.2260 (currently). On a break below, the close from yesterday at the 1.22488 level will be eyed. The low from yesterday at 1.22344 becomes the next step on the downside.

If support holds at the 1.2260 level, the midpoint of the week at the 1.22839 will be a level to eye above. Move above and look for increased upside momentum. If it can’t get above this level, the bulls are not showing they have any power. The sellers remain in control.