XMRUSD finds buyers at key support level
XMR/US Dollar Index (XMRUSD) Technical Analysis Report for Oct 23, 2020 | by Techniquant Editorial Team
XMRUSD ended the week 2.2% higher at 127.49 after edging lower $0.01 (-0.01%) today. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (XMRUSD as at Oct 23, 2020):
Friday's trading range has been $5.03 (3.95%), that's far below the last trading month's daily average range of $8.10. 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 XMRUSD.
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, XMR/USD closed lower but above the prior day's open today, forming a bearish Harami Candle. Additionally, five candlestick patterns are matching today's price action, the Dragonfly Doji which is known as bullish pattern, three bearish patterns, the Bearish Harami Cross Pattern, the Hanging Man and the Northern Doji and one neutral pattern, the Doji. The last time a Hanging Man showed up on October 15th, XMRUSD lost -7.19% on the following trading day.
After trading down to 122.66 earlier during the day, the cryptocurrency bounced off the key technical support level at 123.68 (S1). The failure to close below the support could increase that levels significance as support going forward.
Although Monero is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could speed up should prices move above the nearby swing high at 129.56 where further buy stops might get activated. With prices trading close to this year's high at 135.18, upside momentum could accelerate should XMR be able to break out to new highs for the year.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Dragonfly Doji" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for XMR/USD. Out of 14 times, XMRUSD closed lower 64.29% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 78.57% with an average market move of -19.74%.