EURUSD closes above its opening price after recovering from early selling pressure
Euro/US Dollar (EURUSD) Technical Analysis Report for Aug 04, 2020 | by Techniquant Editorial Team
EURUSD finished Tuesday at 1.1803 gaining 41 pips (0.35%). Trading up to 41 pips lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Monday's high at 1.1797, the forex pair confirmed its breakout through the previous session high after trading up to 9 pips above it intraday.
Daily Candlestick Chart (EURUSD as at Aug 04, 2020):
Tuesday's trading range has been 85 pips (0.72%), that's slightly below the last trading month's daily average range of 91 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 notably higher than usual for EURUSD.
One bearish candlestick pattern matches today's price action, the Last Engulfing Top Pattern.
Buyers managed to take out the key technical resistance level at 1.1782 (now S1), which is likely to act as support going forward. After having been unable to move above 1.1797 in the prior session, EUR/USD ran into sellers again around the same price level today, failing to move higher than 1.1806. The last time this happened on July 28th, EURUSD actually gained 0.65% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Top Pattern" stand out. Its common bearish interpretation has been confirmed for EUR/USD. Out of 87 times, EURUSD closed lower 51.72% 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 57.47% with an average market move of -0.27%.
With four out of the other six Major FX Pairs closing lower today, the ones that stand out on the negative side are USDCAD losing -0.55% and USDCHF closing -0.49% lower. On the flipside the best performers have been AUDUSD closing 0.53% higher and NZDUSD gaining 0.15%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been CHFZAR surging 1.54% and EURZAR closing 1.39% higher. The worst performers of the day have been ZARJPY tanking -1.14% and USDCZK closing -0.92% lower. Read more