EURUSD breaks back above 20-day moving average
Euro/US Dollar (EURUSD) Technical Analysis Report for May 15, 2019 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, EURUSD ended Wednesday at 1.1202 edging lower 2 pips (-0.02%). Trading 21 pips higher after the open, the Euro was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (EURUSD as at May 15, 2019):
Wednesday's trading range has been 47 pips (0.42%), that's slightly below the last trading month's daily average range of 53 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 EURUSD.
Four candlestick patterns are matching today's price action, the Southern Doji which is known as bullish pattern and three neutral patterns, the Doji, the Long-Legged Doji and the Rickshaw-Man. The last time a Rickshaw-Man showed up on July 19, 2018, EURUSD gained 0.70% on the following trading day.
The pair managed to close back above the 20-day moving average at 1.1201.
Although EUR/USD is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Selling could accelerate should prices move below the nearby swing low at 1.1174 where further sell stops might get triggered. With prices trading close to this year's low at 1.1111, downside momentum could speed up should the forex pair break out to new lows for the year. As prices are trading close to May's high at 1.1265, upside momentum might accelerate should the currency mark new highs for the month. As prices are trading close to May's low at 1.1135, downside momentum could speed up should the market mark new lows for the month.
Among the eight 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 165 times, EURUSD closed lower 55.76% 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 54.55% with an average market move of -0.09%.
With five out of the other six Major FX Pairs closing lower today, the ones that stand out on the negative side are GBPUSD losing -0.49% and AUDUSD closing -0.23% lower. None of the markets managed to end the day in the green. Looking at the Minor FX Pairs and Crosses, the winners of the day have been TRYJPY surging 0.5% and EURGBP closing 0.46% higher. The worst performers of the day have been GBPCAD tanking -0.67% and GBPPLN closing -0.67% lower. Read more