AUDEUR closes above its opening price after recovering from early selling pressure
Australian Dollar/Euro (AUDEUR) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
AUDEUR ended the week 1.13% higher at 0.5996 after flat today. Trading up to 30 pips lower after the open, the forex pair managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (AUDEUR as at May 22, 2020):
Friday's trading range has been 36 pips (0.6%), that's far below the last trading month's daily average range of 65 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for AUDEUR. Prices continued to consolidate within a tight trading range between 0.5965 and 0.6018 where it has been caught now for the last three trading days.
Four candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern, two bearish patterns, the Hanging Man and the Northern Doji and one neutral pattern, the Doji. The last time a Northern Doji showed up on May 6th, AUDEUR actually gained 1.10% on the following trading day.
After trading as low as 0.5965 during the day, the pair found support at the 20-day moving average at 0.5969.
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 speed up should prices move above the nearby swing high at 0.6018 where further buy stops could get activated. As prices are trading close to May's high at 0.6049, upside momentum might accelerate should AUD/EUR mark new highs for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Northern Doji" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for AUD/EUR. Out of 76 times, AUDEUR closed higher 56.58% 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 three trading days, showing a win rate of 55.26% with an average market move of 0.06%.