Last week the range was 159 pips from low to high in the EURUSD. As mentioned earlier, this was the 3rd narrowest range going back to December 2007. The other two weeks saw low to high ranges of 352 pips and 492 pips in the week immediately following the non trending week.

Today we got off to a good start in a quest toward a larger trading range for the week (and perhaps a trend). The range today, has overtaken the entire range from last week and then some (179 pips vs 159) The price is now above the high for the month of March (at 1.3555) and looks toward the next target at 1.3380 area. The high for February comes in at the 1.3485 level and this will also be a target for the pair.

So what is an average trading week? The 12-week average of the trading week range is down toward the low since the beginning of 2010 at 274 pips (see chart below). This says that if the low is in place for the week, a move to the 12 week average would take the pair to a high of 1.3465 (1.3191 + 0.0274 =1.3465) . If the weeks price high extends to the high for February, the range would be 294 pips at that point. This is certainly not out of the question and certainly a doable target.

What if the EURUSD really trended higher this week and extended to the 200 day MA at the 1.3611? Such a move would imply a weeks range of 420 pips. This would be be a stretch but also a possibility.

Of course, just because the market squeezed higher, does not mean the upside is the way to go. In other words, what if the upside fails and a move to new lows extends the weeks range instead?

For me, I think that a move below the 1.3279-84 would likely be the breaking point on the downside for traders. This is the 38.2% -50% of the days trading range. A move below this level would also take the pair back below the highs from last weeks trading between 1.3282 and 1.3292. As a result, I think it would likely trigger some additional selling momentum in the pair which could reverse the Monday bias.

For the bulls and trend followers, step one was accomplished today – extend outside last weeks pathetic trading range. Now traders will look for the extensions toward normalcy and further upside potential. IF momentum fails, look for the bias to switch quickly and for the market to trend the other way.