EURPLN closes within previous day's range after lackluster session
Euro/Polish Zloty (EURPLN) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
EURPLN finished the week -1.24% lower at 4.5131 after edging higher 9 pips (0.02%) today. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (EURPLN as at May 22, 2020):
Friday's trading range has been 181 pips (0.4%), that's far below the last trading month's daily average range of 243 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 lower than usual for EURPLN.
After moving lower in the prior session, the currency managed to close higher but below the previous day's open, forming a bullish Harami Candle. Additionally, three candlestick patterns are matching today's price action, the Southern Doji which is known as bullish pattern, one bearish pattern, the Gravestone Doji and one neutral pattern, the Doji. The last time a Southern Doji showed up on April 27th, EURPLN gained 0.30% on the following trading day.
Prices are trading close to the key technical support level at 4.5035 (S1). After having been unable to move lower than 4.5115 in the prior session, the forex pair found buyers again around the same price level today at 4.5096.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day though might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 4.5490.
Although EUR/PLN is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Further selling could move prices lower should the market test April's close-by low at 4.5093.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for EUR/PLN. Out of 117 times, EURPLN closed higher 55.56% 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 53.85% with an average market move of 0.05%.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are GBPUSD losing -0.47% and EURUSD closing -0.44% lower. On the flipside the best performers have been USDCAD closing 0.33% higher and USDCHF gaining 0.08%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDCZK surging 1.09% and USDHUF closing 0.9% higher. The worst performers of the day have been USDMXN tanking -0.58% and SGDHKD closing -0.51% lower. Read more