EURUSD closes lower for the 6th day in a row
Euro/US Dollar (EURUSD) Technical Analysis Report for Feb 11, 2019 | by Techniquant Editorial Team
Moving lower for the 6th day in a row, EURUSD finished Monday at 1.1276 losing 46 pips (-0.41%) on low volume. Today's close at 1.1276 marks the lowest recorded closing price since November 12, 2018. The bears were in full control today, moving the market lower throughout the whole session. Ending with a weak close near the low of the day sets a bearish note for the next session.
Daily Candlestick Chart (EURUSD as at Feb 11, 2019):
Monday's trading range has been 63 pips (0.56%), that's slightly above the last trading month's daily average range of 59 pips. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for EURUSD.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 1.1302 (now R1), which is likely to act as resistance going forward.
Crossing below the lower Bollinger Band for the first time since November 12, 2018, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 1.1388 or signal the beginning of a strong momentum breakout leading to even lower prices. The last time prices broke out below the lower Bollinger Band on November 12, 2018, EURUSD actually gained 0.66% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
2018's low at 1.1216 is within reach and we could see further downside momentum should the FX pair break out beyond.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "6 Consecutive Lower Closes" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for EUR/USD. Out of 16 times, EURUSD closed higher 62.50% 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 two trading days, showing a win rate of 56.25% with an average market move of 0.01%.
With three of the other Major FX Pairs closing higher and three closing lower today, the winners of the day are USDJPY surging 0.57% and USDCHF gaining 0.37%. On the flipside the worst performers have been GBPUSD closing -0.63% lower and AUDUSD losing -0.37%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been USDZAR surging 1.38% and USDMXN closing 1.17% higher. The worst performers of the day have been ZARJPY tanking -0.74% and GBPHKD closing -0.63% lower. Read more