EURGBP closes within previous day's range after lackluster session
Euro/British Pound (EURGBP) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
EURGBP finished the week 0.23% higher at 0.8960 after edging higher 1 pip (0.01%) today on low volume. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (EURGBP as at May 22, 2020):
Friday's trading range has been 41 pips (0.46%), that's far below the last trading month's daily average range of 68 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for EURGBP.
Two candlestick patterns are matching today's price action, the Northern Doji which is known as bearish pattern and one neutral pattern, the Doji. The last time a Northern Doji showed up on February 21st, EURGBP actually gained 0.26% on the following trading day.
Prices are trading close to the key technical resistance level at 0.8994 (R1).
The FX pair shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Buying could speed up should prices move above the close-by swing high at 0.9000 where further buy stops might get triggered.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Northern Doji" stand out. Its common bearish interpretation has been confirmed for EUR/GBP. Out of 42 times, EURGBP closed lower 54.76% 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 57.14% 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 -0.47% and EURUSD closing -0.44% lower. On the flipside the best performers have been USDCAD closing 0.33% higher and USDCHF gaining 0.08%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDCZK surging 1.09% and USDHUF closing 0.9% higher. The worst performers of the day have been USDMXN tanking -0.58% and SGDHKD closing -0.51% lower. Read more