EURCHF breaks below key technical support level
Euro/Swiss Franc (EURCHF) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
EURCHF finished the month 1.14% higher at 1.0762 after losing 8 pips (-0.07%) today on high volume. Trading 27 pips higher after the open, the pair was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on July 24th, EURCHF actually gained 0.76% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (EURCHF as at Jul 31, 2020):
Friday's trading range has been 51 pips (0.47%), that's slightly below the last trading month's daily average range of 53 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for EURCHF. Prices continued to consolidate within a tight trading range between 1.0734 and 1.0798 where it has been caught now for the last three trading days.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Prices broke below the key technical support level at 1.0769 (now R1), which is likely to act as resistance going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might accelerate should prices move below the close-by swing low at 1.0734 where further sell stops could get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Spinning Top" stand out. Its common bearish interpretation has been confirmed for EUR/CHF. Out of 279 times, EURCHF closed lower 51.25% 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 10 trading days, showing a win rate of 55.20% with an average market move of -0.17%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are NZDUSD losing -1.04% and AUDUSD closing -0.72% lower. On the flipside the best performers have been USDJPY closing 1.12% higher and USDCHF gaining 0.48%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDZAR surging 1.87% and GBPZAR closing 1.79% higher. The worst performers of the day have been NZDCAD tanking -1.15% and NZDHKD closing -1.05% lower. Read more