859 pip trading range
It is the last day of March in what has been an outlier month in fundamental and technical perspective.
Fundamentally, not only was there the historic coronavirus pandemic, but the market also absorbed historic Fed and central bank action, and historic global fiscal stimulation.
In trading, the price action has certainly picked up. Looking at the EURUSD:
- The Average trading range per day over the last month of trading (around 22 days) has surged to 177 pips currently. That is the highest average since November 2011. If you go back to mid-February (just 6 weeks ago), the running 22 day average range was only 44 pips.
- The total range for the month zoomed up to 859 pips. The high was at 1.1495 on March 9, and low was 10 trading days later at 1.0636 on March 23. The low to high trading range is the highest since August 2015. Going back to 2011, there have only been 6 other months with ranges greater than 859 pips. Putting the month further in perspective, the low to high trading range for all of 2019 was 691 pips (for the year!). Now it was a non-trend year, but you get the idea.
Looking at the monthly chart, the low for the month moved below a lower trend line at 1.0705, but failed. Going forward, that trend line will be at 1.1675 in the new trading month. If we get more selling, that longer term trend line remains a key technical level on the monthly chart.
For now, the current price is trading at 1.1003.
Drilling from the monthly to the daily chart, the last 4 days has traded above and below the 100 day MA at 1.10425 (see the blue line). The prior two days has seen the price move above the 200 day MA at 1.10773.
As we head into a new trading month, if the price is to move higher (lower USD), the price needs to move above the 100 day MA at 1.10428, the 50% at 1.10633 and the 200 day MA at 1.10774. That area is the yellow shaded area in the chart below. Failure to take out those levels and the sellers remain in control.
Currently, the price is below those three levels at 1.1003. So in the grander picture, the bias is in the favor of the sellers. Watch the 1.0988 level and below that the broken 38.2% of the month range at 1.0962 as the next downside targets.