Weekly Trading Lesson: Average Trading Ranges

As the (FX) market tends to spend most it’s time in a range bound condition, we should note the specific attributes of these trading ranges, as they may help tell us the probable (support & resistance) levels in the near future. The following (4-hour) chart shows the EURUSD in a typical trading range over the past few weeks, months. The market initially created a trading range of approximately 181-pips from a low of 1.2866 to a high or 1.3047. More recently, as the buyers gained strength, the market established a slightly higher support at 1.2912. However during that period of time, the market held virtually the same trading range (from low to high) now extending our resistance level to a new high of 1.3098. For all intensive purposes, the market remained within the same trading range, which simply rose around 50-pips higher, measuring both our support and resistance levels.