EURUSD breaks below key technical support level
Euro/US Dollar (EURUSD) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
EURUSD finished the month 1.15% higher at 1.1233 after edging lower 9 pips (-0.08%) today. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (EURUSD as at Jun 30, 2020):
Tuesday's trading range has been 71 pips (0.63%), that's below the last trading month's daily average range of 96 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for EURUSD. Prices continued to consolidate within a tight trading range between 1.1191 and 1.1288 where it has been caught now for the last three trading days.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on June 17th, EURUSD lost -0.35% on the following trading day.
Prices broke below the key technical support level at 1.1237 (now R1), which is likely to act as resistance going forward.
Although the FX pair is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might accelerate should prices move above the close-by swing high at 1.1288 where further buy stops could get triggered. Selling might speed up should prices move below the nearby swing low at 1.1191 where further sell stops could get activated. As prices are trading close to June's low at 1.1100, downside momentum might accelerate should the forex pair mark new lows for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. While it is usually interpreted as neutral, it has actually shown to be bullish for EUR/USD. Out of 754 times, EURUSD closed higher 53.05% 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 four trading days, showing a win rate of 51.46% with an average market move of 0.02%.
With four out of the other six Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 0.82% and NZDUSD closing 0.53% higher. On the flipside the worst performers have been USDCAD closing -0.62% lower and USDCHF losing -0.41%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been GBPZAR surging 1.31% and GBPJPY closing 1.16% higher. The worst performers of the day have been USDNOK tanking -1.51% and EURGBP closing -0.9% lower. Read more