EURPLN finds buyers around 4.3962 for the third day in a row
Euro/Polish Zloty (EURPLN) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, EURPLN ended the month -0.63% lower at 4.4181 after gaining 82 pips (0.19%) today. Trading up to 181 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. 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 Jul 31, 2020):
Friday's trading range has been 296 pips (0.67%), that's slightly above the last trading month's daily average range of 266 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for EURPLN.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
After trading down to 4.3962 earlier during the day, the FX pair bounced off the key technical support level at 4.4095 (S1). The failure to close below the support could increase that levels importance as support going forward. Prices are trading close to the key technical resistance level at 4.4374 (R1). EUR/PLN found buyers again today around 4.3962 for the third trading day in a row after having found demand at 4.3959 in the previous session and at 4.3963 two days ago. The last time this happened on July 13th, EURPLN actually lost -0.37% on the following trading day.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying might speed up should prices move above the close-by swing high at 4.4374 where further buy stops could get activated. Selling might accelerate should prices move below the nearby swing low at 4.3959 where further sell stops could get triggered. Further selling might move prices lower should the market test June's close-by low at 4.3711.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior two Lows" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for EUR/PLN. Out of 278 times, EURPLN closed lower 54.68% 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 four trading days, showing a win rate of 57.91% with an average market move of -0.03%.
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