EURSEK closes higher for the 3rd day in a row
Euro/Swedish Krona (EURSEK) Technical Analysis Report for Oct 23, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, EURSEK ended the week 0.08% higher at 10.3763 after gaining 147 pips (0.14%) today. Trading up to 187 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 in a lackluster session.
Daily Candlestick Chart (EURSEK as at Oct 23, 2020):
Friday's trading range has been 504 pips (0.49%), that's below the last trading month's daily average range of 673 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for EURSEK. Prices continued to consolidate within a tight trading range between 10.3206 and 10.3947 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 bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
After trading down to 10.3442 earlier during the day, the currency bounced off the key technical support level at 10.3447 (S1). The failure to close below the support could increase that levels importance as support going forward. After having been unable to move lower than 10.3414 in the prior session, EUR/SEK found buyers again around the same price level today at 10.3442. The last time this happened on Tuesday, EURSEK gained 0.09% on the following trading day.
Although the market is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could speed up should prices move above the nearby swing high at 10.3947 where further buy stops might get triggered. Selling could accelerate should prices move below the close-by swing low at 10.3206 where further sell stops might get activated. Further selling could move prices lower should the market test September's nearby low at 10.2871.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Higher Closes" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for EUR/SEK. Out of 160 times, EURSEK closed lower 55.00% 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 eight trading days, showing a win rate of 55.00% with an average market move of -0.06%.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are GBPUSD losing -0.33% and USDCHF closing -0.31% lower. On the flipside the best performers have been EURUSD closing 0.36% higher and AUDUSD gaining 0.31%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been EURGBP surging 0.71% and EURSGD closing 0.47% higher. The worst performers of the day have been GBPPLN tanking -0.81% and GBPCHF closing -0.65% lower. Read more