EURCHF breaks below key technical support level
Euro/Swiss Franc (EURCHF) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
EURCHF finished the month -0.32% lower at 1.0641 after tanking 53 pips (-0.5%) today. This is the biggest single-day loss in over two weeks. The bears were in full control today, moving the market lower throughout the whole session. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (EURCHF as at Jun 30, 2020):
Tuesday's trading range has been 68 pips (0.64%), that's slightly above the last trading month's daily average range of 65 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for EURCHF.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After trading as low as 1.0631 during the day, the pair found support at the 50-day moving average at 1.0632. Prices broke below the key technical support level at 1.0662 (now R1), which is likely to act as resistance going forward. The market was bought again around 1.0631 after having seen lows at 1.0633, 1.0628 and 1.0636 in the last three trading sessions. Obviously there is something going on at that level. The last time this happened on May 26th, EURCHF gained 0.51% on the following trading day.
The FX pair shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling might accelerate should prices move below the nearby swing low at 1.0628 where further sell stops could get triggered.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 50" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for EUR/CHF. Out of 114 times, EURCHF closed lower 56.14% 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 eight trading days, showing a win rate of 55.26% with an average market move of -0.09%.
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