EURGBP runs into sellers again around 0.9062
Euro/British Pound (EURGBP) Technical Analysis Report for Jan 11, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, EURGBP finished the week -0.26% lower at 0.8930 after tanking 89 pips (-0.99%) today. This is the biggest single-day loss in over four months. Today's close at 0.8930 marks the lowest recorded closing price since December 6, 2018. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 0.9012, the market confirmed its breakout through the prior session low after trading up to 90 pips below it intraday.
Daily Candlestick Chart (EURGBP as at Jan 11, 2019):
Friday's trading range has been 140 pips (1.55%), that's far above the last trading month's daily average range of 64 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for EURGBP.
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. The last time this happened on December 18, 2018, EURGBP actually gained 0.34% on the following trading day. Even with a strong opening EUR/GBP closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 0.8875 (S1). The forex pair closed back below the 20-day moving average at 0.8996. After having been unable to move above 0.9059 in the prior session, the currency ran into sellers again around the same price level today, missing to move higher than 0.9062.
Crossing below the lower Bollinger Band for the first time since October 10, 2018, prices have shown unusually strong downward momentum in the short-term. This might either indicate a potential selling climax after which prices could head back up towards the mean of the Bollinger Bands at 0.8996 or signal the beginning of a strong momentum breakout leading to even lower prices.
The pair shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Further selling might move prices lower should the market test December's nearby low at 0.8863.
Among the 18 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Strong Down Move" stand out. Its common bearish interpretation has been confirmed for EUR/GBP. Out of 189 times, EURGBP closed lower 56.08% 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 52.38% with an average market move of 0.01%.
With five out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 0.71% and NZDUSD closing 0.69% higher. On the flipside the worst performers have been EURUSD closing -0.27% lower and USDCHF losing -0.09%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been NZDCAD surging 0.98% and GBPCAD closing 0.97% higher. The worst performers of the day have been EURNZD tanking -1.04% and EURAUD closing -0.67% lower. Read more