EURAUD fails to close above 20-day moving average
Euro/Australian Dollar (EURAUD) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
EURAUD finished the week -1.11% lower at 1.6679 after flat today. Trading 84 pips higher after the open, the forex pair was unable to hold its gains as the bears took control ending the day below its opening price. 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 (EURAUD as at May 22, 2020):
Friday's trading range has been 101 pips (0.61%), that's far below the last trading month's daily average range of 182 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for EURAUD. Prices continued to consolidate within a tight trading range between 1.6616 and 1.6764 where it has been caught now for the last three trading days.
Four candlestick patterns are matching today's price action, the Southern Doji which is known as bullish pattern, two bearish patterns, the Bearish Hikkake Pattern and the Gravestone Doji and one neutral pattern, the Doji. The last time a Gravestone Doji showed up on March 6th, EURAUD actually gained 2.17% on the following trading day.
Prices are trading close to the key technical support level at 1.6616 (S1). After spiking up to 1.6764 during the day, the currency found resistance at the 20-day moving average at 1.6754.
EUR/AUD shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Selling might accelerate should prices move below the close-by swing low at 1.6616 where further sell stops could get activated. As prices are trading close to May's low at 1.6533, downside momentum might speed up should the pair mark new lows for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Southern Doji" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for EUR/AUD. Out of 75 times, EURAUD closed lower 58.67% 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 three trading days, showing a win rate of 58.67% with an average market move of -0.06%.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are GBPUSD losing -0.47% and EURUSD closing -0.44% lower. On the flipside the best performers have been USDCAD closing 0.33% higher and USDCHF gaining 0.08%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDCZK surging 1.09% and USDHUF closing 0.9% higher. The worst performers of the day have been USDMXN tanking -0.58% and SGDHKD closing -0.51% lower. Read more