EURPLN finds support at 200-day moving average
Euro/Polish Zloty (EURPLN) Technical Analysis Report for Jan 11, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, EURPLN finished the week -0.02% lower at 4.2918 after losing 30 pips (-0.07%) today. Trading 138 pips higher after the open, the pair 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.
Daily Candlestick Chart (EURPLN as at Jan 11, 2019):
Friday's trading range has been 285 pips (0.66%), that's slightly above the last trading month's daily average range of 262 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for EURPLN. Prices continued to consolidate within a tight trading range between 4.2775 and 4.3098 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Bearish High-Wave Candle which are both known as bearish patterns.
After trading as low as 4.2793 during the day, the currency found support at the 200-day moving average at 4.2890. The last time this happened on Wednesday, EURPLN actually lost -0.15% on the following trading day. Unable to break through the key technical resistance level at 4.3045 (R1), the FX pair closed below it after spiking up to 4.3078 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. The market was sold again around 4.3078 after having seen highs at 4.3098, 4.3068 and 4.3087 in the last three trading sessions. Obviously there is something going on at that level.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying might accelerate should prices move above the nearby swing high at 4.3098 where further buy stops could get activated. Further buying might move prices higher should the market test December's close-by high at 4.3169. Further selling could move prices lower should the market test December's nearby low at 4.2694.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 200" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for EUR/PLN. Out of 90 times, EURPLN closed lower 53.33% 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 two trading days, showing a win rate of 57.78% with an average market move of -0.10%.
With five out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 0.71% and NZDUSD closing 0.69% higher. On the flipside the worst performers have been EURUSD closing -0.27% lower and USDCHF losing -0.09%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been NZDCAD surging 0.98% and GBPCAD closing 0.97% higher. The worst performers of the day have been EURNZD tanking -1.04% and EURGBP closing -0.99% lower. Read more