EURDKK breaks back below 200-day moving average
Euro/Danish Krone (EURDKK) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
EURDKK finished Thursday at 7.4639 tanking 51 pips (-0.07%) on high volume. This is the biggest single-day loss in over a year. Today's close at 7.4639 marks the lowest recorded closing price since September 12, 2019. Closing below Wednesday's low at 7.4646, EUR/DKK confirmed its breakout through the prior session low after trading up to 23 pips below it intraday.
Daily Candlestick Chart (EURDKK as at Mar 26, 2020):
Thursday's trading range has been 82 pips (0.11%), that's slightly above the last trading month's daily average range of 81 pips. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for EURDKK.
Three candlestick patterns are matching today's price action, the Bullish Hikkake Pattern and the Last Engulfing Bottom Pattern which are both known as bullish patterns and one bearish pattern, the Black Candle. The last time a Last Engulfing Bottom Pattern showed up on March 9th, EURDKK gained 0.08% on the following trading day.
After trading down to 7.4623 earlier during the day, the pair bounced off the key technical support level at 7.4634 (S1). The failure to close below the support might increase that levels importance as support going forward. The FX pair closed back below the 200-day moving average at 7.4685. The market ran into sellers again today around 7.4705 for the third trading day in a row after having found sellers at 7.4711 in the previous session and at 7.4715 two days ago.
Crossing below the lower Bollinger Band for the first time since Tuesday, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 7.4708 or signal the beginning of a strong momentum breakout leading to even lower prices.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling could accelerate should prices move below the close-by swing low at 7.4618 where further sell stops might get activated. 2019's low at 7.4540 is within reach and we could see further downside momentum should the forex pair break out beyond.
Among the 18 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Down Close Near Low of Period" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for EUR/DKK. Out of 213 times, EURDKK closed higher 61.97% 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 63.85% with an average market move of 0.01%.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 2.72% and NZDUSD closing 1.88% higher. On the flipside the worst performers have been USDCHF closing -1.43% lower and USDJPY losing -1.42%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPHKD surging 2.72% and GBPZAR closing 2.65% higher. The worst performers of the day have been USDMXN tanking -4.12% and USDNOK closing -3.12% lower. Read more