EURAUD dominated by bears dragging the market lower throughout the day
Euro/Australian Dollar (EURAUD) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
EURAUD ended the month -2.31% lower at 1.6272 after losing 99 pips (-0.6%) today on low volume. The bears were in full control today, moving the market lower throughout the whole session. Closing below Monday's low at 1.6327, the FX pair confirmed its breakout through the previous session low after trading up to 63 pips below it intraday.
Daily Candlestick Chart (EURAUD as at Jun 30, 2020):
Tuesday's trading range has been 140 pips (0.86%), that's below the last trading month's daily average range of 177 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for EURAUD.
Notwithstanding a strong opening the forex pair closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
The currency closed back below the 20-day moving average at 1.6314. When this moving average was crossed below the last time on June 25th, EURAUD actually gained 0.33% on the following trading day.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already. With its 50-day moving average crossing below its 200-day moving average, the market has entered a so-called "Death Cross" for the first time since February 27th. Showing increasing downward momentum in the short and medium-term the "Death Cross" is known to indicate a potential bear market on the horizon.
Buying could accelerate should prices move above the nearby swing high at 1.6446 where further buy stops might get activated. With prices trading close to this year's low at 1.5973, downside momentum could speed up should the pair break out to new lows for the year. As prices are trading close to June's low at 1.6034, downside momentum might accelerate should EUR/AUD mark new lows for the month.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Death Cross" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for EUR/AUD. Out of 8 times, EURAUD closed higher 75.00% 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 50.00% with an average market move of 0.22%.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 0.82% and NZDUSD closing 0.53% higher. On the flipside the worst performers have been USDCAD closing -0.62% lower and USDCHF losing -0.41%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPZAR surging 1.31% and GBPJPY closing 1.16% higher. The worst performers of the day have been USDNOK tanking -1.51% and EURGBP closing -0.9% lower. Read more