EURUSD dominated by bears dragging the market lower throughout the day
Euro/US Dollar (EURUSD) Technical Analysis Report for Aug 07, 2020 | by Techniquant Editorial Team
EURUSD ended the week 0.06% higher at 1.1786 after tanking 91 pips (-0.77%) today. This is the biggest single-day loss in over four months. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 1.1818, the FX pair confirmed its breakout through the prior session low after trading up to 63 pips below it intraday.
Daily Candlestick Chart (EURUSD as at Aug 07, 2020):
Friday's trading range has been 129 pips (1.09%), that's far above the last trading month's daily average range of 95 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for EURUSD.
Notwithstanding a strong opening the Fiber closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on July 7th, EURUSD actually gained 0.50% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could accelerate should prices move below the close-by swing low at 1.1696 where further sell stops might get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Very Strong Down Move" stand out. Its common bearish interpretation has been confirmed for EUR/USD. Out of 128 times, EURUSD closed lower 54.69% 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 seven trading days, showing a win rate of 54.69% with an average market move of -0.02%.
With three of the other Major FX Pairs closing higher and three closing lower today, the winners of the day are USDCAD surging 0.57% and USDJPY gaining 0.36%. On the flipside the worst performers have been NZDUSD closing -1.33% lower and AUDUSD losing -1.06%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been USDZAR surging 1.26% and CHFZAR closing 0.97% higher. The worst performers of the day have been NZDHKD tanking -1.33% and AUDHKD closing -1.08% lower. Read more