EURUSD dominated by bears dragging the market lower throughout the day
Euro/US Dollar (EURUSD) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, EURUSD ended the week 0.76% higher at 1.0902 after losing 48 pips (-0.44%) today on low volume. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 1.0937, the currency confirmed its breakout through the prior session low after trading up to 52 pips below it intraday.
Daily Candlestick Chart (EURUSD as at May 22, 2020):
Friday's trading range has been 70 pips (0.64%), that's slightly below the last trading month's daily average range of 77 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly 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. The last time a Black Candle showed up on May 6th, EURUSD actually gained 0.33% on the following trading day.
Prices broke below the key technical support level at 1.0926 (now R1), which is likely to act as resistance going forward.
Though the Euro is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
As prices are trading close to May's high at 1.1019, upside momentum could accelerate should EUR/USD mark new highs for the month.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Support S1" stand out. Its common bearish interpretation has been confirmed for EUR/USD. Out of 400 times, EURUSD closed lower 52.00% 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 five trading days, showing a win rate of 52.50% with an average market move of -0.05%.
With three of the other Major FX Pairs closing higher and three closing lower today, the winners of the day are USDCAD surging 0.33% and USDCHF gaining 0.08%. On the flipside the worst performers have been GBPUSD closing -0.47% lower and AUDUSD losing -0.43%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been USDCZK surging 1.09% and USDHUF closing 0.9% higher. The worst performers of the day have been USDMXN tanking -0.58% and SGDHKD closing -0.51% lower. Read more