DXY breaks back below 20-day moving average
Dollar Index (DXY) Technical Analysis Report for Oct 16, 2020 | by Techniquant Editorial Team
DXY ended the week 0.73% higher at 93.715 after losing $0.130 (-0.14%) today. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (DXY as at Oct 16, 2020):
Friday's trading range has been $0.365 (0.39%), that's below the last trading month's daily average range of $0.503. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DXY.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. After moving higher in the previous session, the market closed lower but above the prior day's open today, forming a bearish Harami Candle. The last time this candlestick pattern showed up on September 28th, DXY lost -0.46% on the following trading day.
The contract closed back below the 20-day moving average at 93.810. After having been unable to move above 93.925 in the previous session, DXY ran into sellers again around the same price level today, failing to move higher than 93.885.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might accelerate should prices move above the nearby swing high at 93.925 where further buy stops could get triggered. As prices are trading close to October's high at 94.090, upside momentum might speed up should the contract mark new highs for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 20" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Dollar Index. Out of 157 times, DXY closed higher 54.78% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 56.69% with an average market move of 0.13%.