The EURUSD is trading in a narrow trading range of 43 pips (vs 77 pip average over the last 22 trading days – about a month) as traders await what comes next after the headline driven day yesterday. Today, the CPI inflation came in as expected at 5.1% up from 5.0% last month and a new record high.
Headlined by those themes, the EURUSD pair has rebounded higher in trading today reaching near the low of a swing area between 1.1359 and 1.13684. In doing so, the price did move above both the 100 and 200 hour moving averages which are trading within 5 pips of each other between 1.13409 and 1.1346. The high price reached 1.13584 but has since rotated lower and back below the aforementioned moving averages. The North American session low just reached 1.13356
The last three trading days has now seen the price move above the upper 200 hour moving average. The difference today is the price closed above the MA on a few hourly bars (the last two days saw the breaks quickly rejected with the price closing below the MA levels. Nevertheless, the break has not necessarily found strong upside momentum either. In addition, the high today was lower than yesterdays high and the high yesterday was lower than Monday’s high too. That
So traders are battling back-and-forth, reacting to the news but even those reactions, the price action moves dollars are somewhat muted.
Nevertheless, I would still expect the moving averages to be barometers for bullish and bearish bias. Move above with some momentum, and stay above, would be more bullish. Move below and the bias is in the favor of the sellers.
if the price is able toget above the 1.1359 – 1.13864 level, traders would start to target the 100 day moving average at 1.13904. The price last traded above the 100 day moving average back on February 11.
On the downside, moving below 1.13189 would have traders targeting the 50% midpoint of the 2022 trading range at 1.13075 followed by the swing low area between 1.1279 and1.12874.
In addition to the range being narrow today, over the last eight trading days the entire up and down range is only 115pips. At some point, getting outside of that up and down trading range will take place. However currently the price is stock near the middle of that range as traders continue to fight it out for control.