Record low ranges for many of the major currency pairs
If I were to name the currency year, it would be "The Year of Low Volatility".
Three of the currency pairs had low to high trading ranges that were the lowest since 1980. Even the GBPUSD which had alll the Brexit goings on, had a relatively low range year (the 5th lowest since 2000).
If the low ranges are indicative of non-trending, the good news is non-trending transitions to trending. As a result, I would expect a more volatile/larger trading range for 2020 for many of the currency pairs. Keep that thought in mind in 2020.
Below are the graphical historical ranges for the major currency pairs versus the dollar along with comments about each. .
EURUSD.
The low to high trading range for the EURUSD in 2019 could only extend to 691 pips. That was the lowest range going back to 1980. The prior low was 883 pips back in 1996. In 1997, the range rose to 2280 pips.
The low for the year reached 1.0879. The high for the year was up at 1.1570. The pair is 347 pips or so off the low price and 344 pips off the high price. That puts the pairs price smack dab in the middle of the trading range for the year. Which way do we tilt in 2020?
GBPUSD
With all the Brexit and political upheaval in the UK, one might've expected the GBPUSD low to high trading range to be nearer the highs.
The reality is at 1555 pips for the year it was the 3rd lowest trading range since 2010 and the 5th lowest trading range since the year 2000. That is not exactly lighting the world on fire.
The high for the year was at 1.3514 (reached in December after the election results). The low for the year was at 1.1959 reached on September 3.
The pair is trading at 249 pips off of its high for the year and 1306 pips off of the low. So it is going out with a more bullish bias. Does that upside momemtum continue in 2020. For a look at the pair technically, click here.
USDJPY
For the USDJPY, the low to high trading range came in at 794 pips. That was the lowest trading range going back to 1980. Overall, however the last 4 of 5 years have - on a relative basis - been near the lowest ranges for the USDJPY with ranges of 1000 in 2015, 1128 in 2017, 999 in 2018 and 794 this year. In 2016 there was a larger range of 2267 pips.
Since 1999, the largest range was in 2008 at 2507 pips with an average of 1572.57. That makes the 794 pips equal to about 50% of the average over the last 21 years. Look for something bigger in 2020.
USDCHF
The low to high trading range for the USDCHF was also the lowest since 1980 at 590 pips. The range is over the prior 3 years were over 900 pips but below 940 pips (an average of 918 pips). The 590 pip range this year was only 64% of the average range over the prior 3 years.
The high for the year reached 1.0237 on April 26th. The low was today at 0.9647 (both the USDCHF and USDCAD reached new year lows today). However, a word of caution is that the low today only took out the year low by about 14 pips and the price is back above that old low at 0.9658. Although the nod still goes to the shorts, traders willl be looking for the price to move back below the 0.9658 early in 2020.
USDCAD
The USDCAD trading at the high for the year on the 1st trading day of the year, and the low for the year on the last trading day of the year (today). That does not happen often. So let's hear it for the USDCAD sellers!
Despite that unique situation, the USDCAD traded with a high to low trading range of 711 pips which was the lowest since 1996. Last year the range was nearly double at 1414 pips. There was also a lot of ups and downs in the year. Nevertheless, the new year is ending with a bearish bias for the USDCAD.
AUDUSD
The AUDUSD low to high trading range came in at 624 pips. That was the lowest since 1992 when the range was 632 pips. The lowest range going back to 1980 was 563 pips in 1991.
The high for the year for the year was back on January 31 at 0.7295, while the low was reached on October 1 at 0.6671. The pair is trading 353 pips off of the low and 271 pips off of the years high. So it is above the 50% midpoint of the trading years range. The midpoint comes in at 0.6983 (the current price is 0.70818).
NZDUSD
The NZDUSD outgained its geographical neighbor (AUDUSD) with a 738 pip trading range. That was the lowest range since 2001 when the range was 595 pips. However, in 2017 the range is only 777 pips. Last year the range was 1013.
So relatively speaking, the NZDUSD outperformed most of the other majors vs the USD but was stll near recent low ranges for the pair.
