EURGBP closes within prior day's range after lackluster session
Euro/British Pound (EURGBP) Technical Analysis Report for Apr 16, 2019 | by Techniquant Editorial Team
EURGBP ended Tuesday at 0.8645 gaining 15 pips (0.17%) on low volume. Today's close at 0.8645 marks the highest recorded closing price since March 21st. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (EURGBP as at Apr 16, 2019):
Tuesday's trading range has been 35 pips (0.41%), that's far below the last trading month's daily average range of 72 pips. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for EURGBP. Prices continued to consolidate within a tight trading range between 0.8591 and 0.8660 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Bearish Hikkake Pattern and the Last Engulfing Top Pattern which are both known as bearish patterns. The last time a Bearish Hikkake Pattern showed up on March 20th, EURGBP actually gained 0.29% on the following trading day.
The FX pair managed to close back above the 50-day moving average at 0.8628. Unable to break through the key technical resistance level at 0.8657 (R1), the forex pair closed below it after spiking up to 0.8660 earlier during the day. The failure to close above the resistance could increase that levels importance going forward. The market found buyers again today around 0.8625 for the third trading day in a row after having found demand at 0.8619 in the previous session and at 0.8618 two days ago.
While the pair is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Selling could accelerate should prices move below the close-by swing low at 0.8591 where further sell stops might get activated. Further buying could move prices higher should the market test March's nearby high at 0.8723.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Hikkake Pattern" stand out. Its common bearish interpretation has been confirmed for EUR/GBP. Out of 115 times, EURGBP closed lower 59.13% 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 57.39% with an average market move of -0.15%.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are GBPUSD losing -0.4% and EURUSD closing -0.2% lower. On the flipside the best performers have been USDCHF closing 0.38% higher and AUDUSD gaining 0.03%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been TRYJPY surging 0.57% and CADCHF closing 0.52% higher. The worst performers of the day have been EURTRY tanking -0.82% and USDTRY closing -0.63% lower. Read more