EURSEK closes above its opening price after recovering from early selling pressure
Euro/Swedish Krona (EURSEK) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, EURSEK ended the month -1.28% lower at 10.3406 after gaining 238 pips (0.23%) today on high volume. Trading up to 431 pips lower after the open, the FX pair managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on July 24th, EURSEK actually lost -0.30% on the following trading day. Closing above Thursday's high at 10.3339, the pair confirmed its breakout through the previous session high after trading up to 173 pips above it intraday.
Daily Candlestick Chart (EURSEK as at Jul 31, 2020):
Friday's trading range has been 779 pips (0.76%), that's above the last trading month's daily average range of 634 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for EURSEK.
After spiking up to 10.3512 during the day, the currency found resistance at the 20-day moving average at 10.3408. After having been unable to move lower than 10.2713 in the prior session, EUR/SEK found buyers again around the same price level today at 10.2733.
Though the forex pair is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
With prices trading close to this year's low at 10.2159, downside momentum might accelerate should the market break out to new lows for the year.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Up Close near high of period" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for EUR/SEK. Out of 480 times, EURSEK closed lower 55.63% 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 57.29% with an average market move of -0.19%.
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