FXE breaks below key technical support level
CurrencyShares Euro ETF (FXE) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
FXE finished the month 4.78% higher at 111.06 after losing $0.63 (-0.56%) today. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (FXE as at Jul 31, 2020):
Friday's trading range has been $0.81 (0.73%), that's far above the last trading month's daily average range of $0.47. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for FXE.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 111.08 (now R1), which is likely to act as resistance going forward. After having been unable to move above 111.69 in the previous session, the market ran into sellers again around the same price level today, failing to move higher than 111.71. The last time this happened on July 20th, FXE actually gained 0.66% on the following trading day.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 108.52.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might accelerate should prices move below the nearby swing low at 110.43 where further sell stops could get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "52 Week High" stand out. Its common bullish interpretation has been confirmed for FXE. Out of 66 times, FXE closed higher 54.55% 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 seven trading days, showing a win rate of 51.52% with an average market move of 0.05%.