Range is narrow at 76 pips vs 22-day average of 106 pips
The EURUSD has a relatively narrow 76 pip trading range today vs. a 22 day average of 106 pips. There is room to roam on an extension.
The price is trading near the low for the day at the 1.05616. Remember the 1.0560 level was the low price going back to April 7, 2003 (see chart below). This low at the time, tested the 100 day moving average and quickly bounced. The price did not trade that level again until this week. If the price is to extend to the downside, this level needs to be broken (and stay below).
Looking at the hourly chart below, the 100 hour MA is starting to catch up with the price. The MA was last above this moving average back on Feb 26th. If the price continues to consolidate, the market will have a level to lean against to define and limit risk.
Overall, the central bank policy disparity between the ECB and the Fed continues to weigh on the EURUSD. The rally yesterday fizzled out. With the 100 hour MA approaching, the pair is likely to find sellers against it on any corrective test. Below the 1.0560 level, is the 1.0500 (this was the low going back to March 2003. Below that, and the door opens toward the 2002 low at 1.0334. Parity is not far from there....
