EURNOK finds buyers at key support level
Euro/Norwegian Krone (EURNOK) Technical Analysis Report for Aug 04, 2020 | by Techniquant Editorial Team
EURNOK ended Tuesday at 10.7337 edging lower 101 pips (-0.09%). Trading 290 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 previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (EURNOK as at Aug 04, 2020):
Tuesday's trading range has been 598 pips (0.56%), that's far below the last trading month's daily average range of 1021 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for EURNOK. Prices continued to consolidate within a tight trading range between 10.6822 and 10.7899 where it has been caught now for the last three trading days.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After trading down to 10.7110 earlier during the day, the market bounced off the key technical support level at 10.7229 (S1). The failure to close below the support could increase that levels significance as support going forward. When prices bounced off a significant support level the last time on July 23rd, EURNOK actually lost -0.24% on the following trading day.
Although the forex pair is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could speed up should prices move above the close-by swing high at 10.7899 where further buy stops might get activated. Selling could accelerate should prices move below the nearby swing low at 10.6822 where further sell stops might get triggered. Further buying could move prices higher should the market test July's close-by high at 10.8325.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Spinning Top" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for EUR/NOK. Out of 252 times, EURNOK closed higher 54.37% 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 54.76% with an average market move of 0.22%.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are USDCAD losing -0.55% and USDCHF closing -0.49% lower. On the flipside the best performers have been AUDUSD closing 0.53% higher and EURUSD gaining 0.35%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been CHFZAR surging 1.54% and EURZAR closing 1.39% higher. The worst performers of the day have been ZARJPY tanking -1.14% and USDCZK closing -0.92% lower. Read more