The EURUSD wandered lower below trendline support. It has now wandered back higher to test the broken trendline at the 1.3348 level.
With liquidity conditions getting lower and lower and weekend position squaring possibile, anything can happen between now and the close. The pair is up on the day and up on the week (closed at 1.3266 last Friday), with most of the action on Monday. The range for the week – if it stays contained this afternoon – is around 194 pips. This is still pretty narrow. Last weeks range was the 3rd lowest going back to December 2007 (at 159 pips). The average day’s range for 2011 was 157 pips. Volatility is down in 2012 so far.
With next week having ISM on Monday, FOMC minutes on Tuesday, and Unemployment on Friday highlighting the US calendar, and EU PMI on Monday, Retail sales and an ECB meeting on Thursday, there is the potential for some fireworks and a break out of the quagmire this pair is in. What may be a problem is Friday is Good Friday/start of Passover and this may throttle back the need to trade.
