EURNOK runs into sellers again around 9.9896
Euro/Norwegian Krone (EURNOK) Technical Analysis Report for Jan 24, 2020 | by Techniquant Editorial Team
EURNOK ended the week 0.94% higher at 9.9760 after gaining 304 pips (0.31%) today. Today's close at 9.9760 marks the highest recorded closing price since December 18, 2019. Trading up to 239 pips lower after the open, the forex pair managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on Monday, EURNOK gained 0.62% on the following trading day. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (EURNOK as at Jan 24, 2020):
Friday's trading range has been 680 pips (0.68%), that's far above the last trading month's daily average range of 520 pips. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for EURNOK.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Last Engulfing Top Pattern.
Buyers managed to take out the key technical resistance level at 9.9722 (now S1), which is likely to act as support going forward. After having been unable to move above 9.9826 in the previous session, the market ran into sellers again around the same price level today, missing to move higher than 9.9896.
Crossing above the upper Bollinger Band for the first time since Wednesday, prices have shown unusually strong upward momentum in the short-term. This could either indicate a potential buying climax after which prices might head back down towards the mean of the Bollinger Bands at 9.8883 or signal the beginning of a strong momentum breakout leading to even higher prices.
The currency shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close above the upper Bollinger Band" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for EUR/NOK. Out of 182 times, EURNOK closed lower 52.75% 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 64.84% with an average market move of -0.32%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are GBPUSD losing -0.41% and AUDUSD closing -0.34% lower. On the flipside the best performers have been USDCHF closing 0.23% higher and USDCAD gaining 0.14%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDNOK surging 0.57% and USDPLN closing 0.53% higher. The worst performers of the day have been GBPJPY tanking -0.6% and AUDJPY closing -0.53% lower. Read more