AUDEUR breaks back below 200-day moving average
Australian Dollar/Euro (AUDEUR) Technical Analysis Report for Feb 20, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, AUDEUR finished Thursday at 0.6133 tanking 46 pips (-0.74%) on high volume. This is the biggest single-day loss in over two weeks. The last time we've seen such an unusually strong single-day loss on January 31st, AUDEUR actually gained 0.38% on the following trading day. Closing below Wednesday's low at 0.6176, the currency confirmed its breakout through the previous session low after trading up to 53 pips below it intraday.
Daily Candlestick Chart (AUDEUR as at Feb 20, 2020):
Thursday's trading range has been 70 pips (1.13%), that's far above the last trading month's daily average range of 45 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for AUDEUR.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 0.6123 earlier during the day, the FX pair bounced off the key technical support level at 0.6132 (S1). The failure to close below the support could increase that levels significance as support going forward. The pair closed back below the 200-day moving average at 0.6168 for the first time since February 11th.
AUD/EUR shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 200" stand out. Its common bearish interpretation has been confirmed for AUD/EUR. Out of 48 times, AUDEUR closed lower 52.08% 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 64.58% with an average market move of -0.30%.