EURGBP closes lower for the 4th day in a row
Euro/British Pound (EURGBP) Technical Analysis Report for Jul 03, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, EURGBP ended the week -0.92% lower at 0.9012 after edging lower 2 pips (-0.02%) today on low volume. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (EURGBP as at Jul 03, 2020):
Friday's trading range has been 27 pips (0.3%), that's far below the last trading month's daily average range of 64 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for EURGBP.
Two candlestick patterns are matching today's price action, the Southern Doji which is known as bullish pattern and one neutral pattern, the Doji. The last time a Doji showed up on June 23rd, EURGBP gained 0.28% on the following trading day.
After trading as low as 0.9002 during the day, the market found support at the 20-day moving average at 0.9005. After having been unable to move lower than 0.9003 in the previous session, the forex pair found buyers again around the same price level today at 0.9002.
While the FX pair is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might accelerate should prices move below the close-by swing low at 0.9001 where further sell stops could get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for EUR/GBP. Out of 80 times, EURGBP closed higher 57.50% 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 57.50% with an average market move of 0.34%.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are NZDUSD gaining 0.35% and AUDUSD closing 0.2% higher. On the flipside the worst performers have been USDCAD closing -0.1% lower and USDCHF losing -0.01%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been EURHUF surging 0.57% and USDHUF closing 0.44% higher. The worst performers of the day have been USDNOK tanking -0.6% and EURNOK closing -0.51% lower. Read more