EURGBP slips to lowest close since June 29, 2016
Euro/British Pound (EURGBP) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 5th day in a row, EURGBP ended the week -2.26% lower at 0.8302 after losing 9 pips (-0.11%) today. Today's close at 0.8302 marks the lowest recorded closing price since June 29, 2016. Trading 33 pips higher after the open, the currency was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (EURGBP as at Feb 14, 2020):
Friday's trading range has been 45 pips (0.54%), that's slightly below the last trading month's daily average range of 55 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for EURGBP.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar.
Prices are trading close to the key technical support level at 0.8296 (S1). After having been unable to move lower than 0.8296 in the previous session, the FX pair found buyers again around the same price level today at 0.8299. The last time this happened on February 7th, EURGBP actually lost -0.53% on the following trading day.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day although might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 0.8441.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling might speed up should prices move below the nearby swing low at 0.8296 where further sell stops could get triggered. 2019's low at 0.8277 is within reach and we might see further downside momentum should the forex pair break out beyond.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "5 Consecutive Lower Closes" stand out. Its common bearish interpretation has been confirmed for EUR/GBP. Out of 31 times, EURGBP closed lower 51.61% 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 two trading days, showing a win rate of 61.29% with an average market move of -0.11%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are USDCAD losing -0.12% and EURUSD closing -0.08% lower. On the flipside the best performers have been USDCHF closing 0.28% higher and GBPUSD gaining 0.02%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDSEK surging 0.51% and EURSEK closing 0.43% higher. The worst performers of the day have been EURHUF tanking -0.65% and USDHUF closing -0.58% lower. Read more