March is done and dusted. What can we look forward to in the EURUSD in April?
Something more than what we experienced in March?
Is that all bad?
- There is a trend line that cuts across at 1.2274. Getting and staying below is more bearish.
- The 1.2205-14 are swing lows in January and February (see green circles)
- If you take away the March 1 swing low to 1.2153, the range for March is only 238 pips (low of 1.2238 and high of 1.2476) That is a very, very low trading range.
- The blue MA line is the 100 day MA. It is at 1.2111 and moving higher toward the low extreme at about 7 pips per day pace. In about 7 trading days the MA will reach the low extreme prices at 1.2153-64. That will increase that areas importance as a technical area in April
- Non trending for nearly 3 months of trading
- Up and down trading
- The price is below the 50% midpoint. More bearish.
- The 1.2274 is a trend line target to get and stay below. Move below is more bearish.
- The 1.2210 is a swing level to eye. Move below is more bearish
- The 1.2153-64 is home to swing lows. Move below is more bearish
- The 100 day MA is at 1.2111 but moving higher by about 7 pips every day. In 7 or so trading days, it will be at the lower extreme increasing that area's importance for bullish/bearish bias.
- The swing highs at 1.2445 (March 7 and 8 highs),
- 1.2476 (high for March),
- 1.2522, 1.25366 and 1.2555 (the highs from January and February) are targets.
Taking a broader look at the monthly chart.
The narrow trading range and why it is important.
There is one final technical point as we head into a new trading month.
That is, if you throw out the first trading day of the month in March, the trading range was only 238 pips (it was 322 in total with March 1 included).
Historically, there have only been 4 months when the range was at or below that range level over a calendar month. The lower chart in the chart above shows the pip range for each calendar month. The green numbered circles are the only months where the range was at or less than 238 pips going back 10 years. That is not a lot of months.
Again, I am fudging the results as the range for the month was 322 pips with March 1 included. However, the point is on a running month of trading basis, the range will be 238 pips after Monday's trading. That is non-trending.
What I know is non-trending transitions to trending (and/or bigger ranges). So traders have a reason to anticipate something bigger and better as far as high/low pip ranges in April.
Do we get a more trend-like move too?
After nearly 3 months of non-trend, up and down, the time may be ripe for a trend in a directional basis as well.
So anticipate a trend-like possibility.
How will we know?
Start taking out the technical levels outlined above.
One final note, is that although the bias is more bearish now (below the midpoint of the range), the price can rocket higher too. REMEMBER, we are still above the 100 day MA. So as a trader, we need to be true to the technicals. Listen to what they are saying, even if you don't like the fundamental story.
- March is done and dusted and the market stayed in the near three month trading range.
- The range was narrow inclusive of March 1, and really narrow sans March 1.
- That gives traders the reason to anticipate a larger trading range
- The up and downs over the last 3 months also suggest that the pair is getting ready to transition from non-trending to trending.
- As a result, it is wise to be on the lookout for a trend-like move too (either higher or lower).
- Follow the technical levels for the clues. They provide nice stepping stones.
PS. I got a reminder on Facebook, that "Attacking Currency Trends" is 7 years old. Lots of the breakdown from above, you can learn in the book.
I always liked to sign the book, "Remember, attack the trends in your trading and your life".
Maybe April will give us some trends in our trading (be on the lookout). As for your life, lookout for those good trends to follow and be sure to attack them too.