DKKEUR closes lower for the 2nd day in a row
Danish Krone/Euro (DKKEUR) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, DKKEUR ended the month 0.06% higher at 0.13427 after tanking 5 pips (-0.04%) today on high volume. Today's close at 0.13427 marks the lowest recorded closing price since July 7th. Closing below Thursday's low at 0.13432, the pair confirmed its breakout through the prior session low after trading up to 8 pips below it intraday.
Daily Candlestick Chart (DKKEUR as at Jul 31, 2020):
Friday's trading range has been 13 pips (0.1%), that's far above the last trading month's daily average range of 8 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for DKKEUR.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 0.13424 earlier during the day, the FX pair bounced off the key technical support level at 0.13426 (S1). The failure to close below the support might increase that levels importance as support going forward. The market closed below the 20-day moving average at 0.13432 for the first time since June 19th. After having been unable to move above 0.13438 in the previous session, the forex pair ran into sellers again around the same price level today, failing to move higher than 0.13437. The last time this happened on Wednesday, DKKEUR lost -0.04% on the following trading day.
Although the currency is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
As prices are trading close to July's low at 0.13417, downside momentum might speed up should DKK/EUR mark new lows for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed below last periods low" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for DKK/EUR. Out of 194 times, DKKEUR closed higher 42.27% 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 53.09% with an average market move of 0.01%.