Trading near the low
The EURUSD has started each of the NA session in a narrow choppy range.
- On Monday, the range was 30 pips when NA traders entered. The market broke lower and extended to 70 pips by the end of the day
- On Tuesday, the range was 24 pips, and the price broke lower again and extended to 46 pips at the extreme.
- Yesterday, the range was 27 pips. The price moved lower at first, but extended higher by the end of the day and reached a range of 42 pips,
Today, the North American session started with a 24 pip range. The pair is to 27 pips (yippee) so far. UGH.
Technically, the peak today moved above the 1.1171 level that I have been harping about all week in EURUSD posts. The high reached 1.1177, but stayed below the 200 hour MA at 1.11792 currently (green line in the chart above). We are now below the 100 hour MA (blue MA line) at 1.1161 (also a lower swing level going back in time). The sellers remain more in control below those levels. Bias is lower.
What is risk now?
Which level you define your risk is up to you. When ranges are so narrow, you have to either keep risk tight to levels (like the 1.1161) and hope "the market" agrees with you and starts a run and extension in the direction of the bias. Alternatively, you can use the extremes (i.e. high or 200 hour MA) as risk defining level and just let it run.
If you like the upside and think the choppy action and move lower is a buying opportunity, I would feel more comfortable right now on a move back above the 100 hour MA. Of course, longs would feel more comfortable above 1.1171 and then the 200 hour MA too (at 1.1179).
In tiny ranges, you can turn around and before long be at the other extreme. Eventually, there is a move away. "The market" decides what it wants to do and the buyers or sellers overwhelm. You will see it in the price action. Until then, traders need to deal in the minutia and look for the breaks and targets to guide if the move is the "big one", or at least something that might extend the range to something more respectable.
