EURUSD breaks back above 20-day moving average
Euro/US Dollar (EURUSD) Technical Analysis Report for Dec 06, 2018 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, EURUSD ended Thursday at 1.1377 gaining 33 pips (0.29%) on high volume ahead of tomorrow's NFP report. Closing above Wednesday's high at 1.1361, the forex pair confirmed its breakout through the previous session high after trading up to 51 pips above it intraday.
Daily Candlestick Chart (EURUSD as at Dec 06, 2018):
Thursday's trading range has been 91 pips (0.8%), that's slightly above the last trading month's daily average range of 81 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for EURUSD. Prices continued to consolidate within a tight trading range between 1.1305 and 1.1419 where it has been caught now for the whole last trading week.
The currency managed to close back above the 20-day moving average at 1.1348 for the first time since November 29th. Prices are trading close to the key technical resistance level at 1.1419 (R1). The FX pair was bought again around 1.1321 after having seen lows at 1.1311, 1.1319 and 1.1319 in the last three trading sessions. Obviously there is something going on at that level. The last time this happened on September 26th, EURUSD actually lost -0.85% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might speed up should prices move above the close-by swing high at 1.1419 where further buy stops could get triggered. Selling might accelerate should prices move below the nearby swing low at 1.1311 where further sell stops could get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Break through SMA 20" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for EUR/USD. Out of 157 times, EURUSD closed lower 57.32% 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 53.50% with an average market move of -0.01%.
With four out of the other six Major FX Pairs closing lower today, the ones that stand out on the negative side are USDCHF losing -0.51% and AUDUSD closing -0.47% lower. On the flipside the best performers have been GBPUSD closing 0.4% higher and USDCAD gaining 0.19%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been CHFZAR surging 1.97% and GBPZAR closing 1.85% higher. The worst performers of the day have been ZARJPY tanking -1.96% and AUDCHF closing -0.98% lower. Read more