EURUSD trading near highs for the day

Him himThe EURUSD is higher on the day for the 2nd consecutive day, but the gains are modest and the last 5 hours has seen a narrow up and down trading range.

Over the last 5 hourly bars, the pair has been in a range between 1.04056 to 1.04375. The current price is trading closer to the upper end of that 32 pip trading range at 1.0429. The price is also back above the swing high from Friday's trade at 1.04189.

If the buyers can keep the momentum going to the upside (the range for the day is only 49 pips vs. a 94 pip average over the last 22 trading days), the falling 100 hour moving average and the 38.2% retracement of the move down from the May 5 high both come in a near 1.0459.

The combination of the 2 levels would likely lead to some cause for pause with a break above increasing the bullish bias.

A break above would also next target the low of the swing area that confined the trading range from April 27 to May 12 (red box in the chart above) at 1.04709. Breaking outside of the box last week led to a more negative bias.

Should the price move back into that red box area (starting at 1.04709), it would likely disappoint the sellers and lead to increased upside potential.