The EURUSD has pushed above the 1.3292 level which has capped the non trending range over the last 6 days of trading . The range from last week of 159 pips was the 3rd lowest range since December 2007. This suggests that this weeks range should be something more as non trending tends to transition into trending. In the week after a 155 pip range in April 10, 2011, the following week had a range of 492 pips. After the December 19th 2010 week when the range was 146 pips, the range for the following week was 352 pips.
The break above the highs of last week suggest a further move higher. The next target for the pair comes in at the 1.3355 level which is the high for the month (reached on March 1st) and after that the 1.3375 area (see chart below).
On the downside, traders will look for the price to stay above the1.3281-897 area. This is the 38.2% of the move up on the last leg higher. If the move is supported by the “market” (i.e., the largest institutional traders), this retracement level should hold. In the chart below, this “leg” higher was started by using the 100 and 200 bar MAs . A break above these resistance levels helped propel the price higher.
The move higher is being supported by Bernanke’s comments suggesting he fears the job gains may not be sustained and therefore the Fed is likely to keep rates low. This is helping the extension into risk, including the EURUSD.