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EURUSD 30 MINUTE CHART – Too tight to last
EURUSD testing upside but would need to get through 1.0895 to break the current range.
As this 30 minute chart shows, it has been trading in a 9-pip range for over 2 hours, one so tight that it will not last for much longer (the intra-day range has so far been just 20 pips, 1.0860-80)
So there is nothing to get excited about the upside unless 1.0895 is decisively taken out.
Otherwise, look for 1.o850 tp continue to set its intra-day tone.
USDX 4 HOUR CHART – EURUSD PROXY?
As I noted, with EURUSD representing 57.6% of the index, it often acts as a proxy for the currency.
In this chart, the highlighted red AT line being broken would need to be sustained and then confirmed by a solid EURUSD move above 1.0863 to suggest a potential shift in direction or at least a loss of upward momentum
EURUSD 4 HOUR CHART – TOO TIGHT A RANGE TO LAST FOR TOO LONG’
The best I can say in this holiday-thinned session is how EURUSD ends the week is more important than how it starts.
I can also say that the current 1.0805-1.0895 range is too tight to last for too long.
Is it a coincidence that 1.085, the intra-day bias setter, is also the midpoint of the current range?
Otherwise, chart levels are clear as indicated on this chart.
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USDJPY WEEKLY CHART – UPTREND SINCE THE START OF 2023
USDJPY has been in a weekly uptrend since the start of 2023, which elevates the importance of its weekly trendline. There is already a 10% range from the low to the high this yeasr
Where is the risk?
While the techincal risk is still pointed up (note the trendline), the volatility risk is if the currency reverses to the downside. However, betting on intervention or other policy moves to reverse the trend is expensive given the cost of a rollover being long JPY, pitting those trading on hope vs. those trading on fundamentals.
To keep it simple,
152.92 = 50% of this year’s range and 151.91 is last year’s high.
To make it even simpler, USDJPY trades with support as long as it stays above 155 and only sub-150 trade would suggest the high is in.
On the upside, levels are clear
158.00 and 160.16
This suggests 158-160 would be the intervention alert zone.
I haven’t mentioned JPY crosses, where there is less chance of intervention.
EURUSD WEEKLY CHART – INSIDE YEAR
I remember when central banks used to look at 10 big figure ranges, such as EURUSD 1.00-1.10, 1.05-1.15. 1.10-1.20
Looking at this weekly chart not only is the range less than 10 big figures but is also so far an inside year.
Taking it one step further, 50% of the 2023 range is 1.0860 vs Friday’s close around 1.0845
Compare that with USDJPY and you can see why the EURUSD has been better suited for short-term trends rather than betting on longer-term trends and breakouts.
This does not mean it will not trade like this forever but at least it puts the price action in perspective.
So without fine-tuning, you can either use 1.0860 (I prefer 1.0850, which is close enough) to set its tone for day trading while within 1.08-1.09, a range too tight to last,.
Fed’s preferred inflation indicator (PCE) will likely show that disinflation stalled in April
Eurozone inflation is forecast to have increased in May but the move up is seen as atemporary.
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