EURGBP breaks below Thursday's low
Euro/British Pound (EURGBP) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, EURGBP ended the month -0.64% lower at 0.9000 after losing 47 pips (-0.52%) today on high volume. Today's close at 0.9000 marks the lowest recorded closing price since July 10th. Closing below Thursday's low at 0.9017, EUR/GBP confirmed its breakout through the prior session low after trading up to 36 pips below it intraday.
Daily Candlestick Chart (EURGBP as at Jul 31, 2020):
Friday's trading range has been 82 pips (0.91%), that's 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 slightly lower than usual for EURGBP.
One bearish candlestick pattern matches today's price action, the Black Candle.
The currency closed below the 50-day moving average at 0.9011 for the first time since May 14th. When this moving average was crossed below the last time on April 23rd, EURGBP actually gained 0.26% on the following trading day.
The FX pair shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
As prices are trading close to July's low at 0.8938, downside momentum could speed up should the pair mark new lows for the month.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 50" stand out. Its common bearish interpretation has been confirmed for EUR/GBP. Out of 113 times, EURGBP closed lower 57.52% 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 60.18% with an average market move of -0.15%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are NZDUSD losing -1.04% and AUDUSD closing -0.72% lower. On the flipside the best performers have been USDJPY closing 1.12% higher and USDCHF gaining 0.48%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDZAR surging 1.87% and GBPZAR closing 1.79% higher. The worst performers of the day have been NZDCAD tanking -1.15% and NZDHKD closing -1.05% lower. Read more