EURUSD closes below its opening price unable to hold early session gains
Euro/US Dollar (EURUSD) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, EURUSD ended Wednesday at 1.1817 losing 30 pips (-0.25%). Trading 32 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 below Tuesday's low at 1.1839, the Fiber confirmed its breakout through the prior session low after trading up to 51 pips below it intraday.
Daily Candlestick Chart (EURUSD as at Sep 16, 2020):
Wednesday's trading range has been 94 pips (0.79%), that's slightly above the last trading month's daily average range of 84 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for EURUSD.
Prices are trading close to the key technical support level at 1.1782 (S1). The currency closed back below the 20-day moving average at 1.1840 for the first time since September 10th. When this moving average was crossed below the last time on September 4th, EURUSD lost -0.20% on the following trading day.
While the market is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could speed up should prices move above the nearby swing high at 1.1901 where further buy stops might get triggered. Selling could accelerate should prices move below the close-by swing low at 1.1753 where further sell stops might get activated. Further selling could move prices lower should the market test August's nearby low at 1.1696.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 20" stand out. Its common bearish interpretation has been confirmed for EUR/USD. Out of 162 times, EURUSD closed lower 54.32% 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 53.09% with an average market move of -0.07%.
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 0.61% and NZDUSD closing 0.27% higher. On the flipside the worst performers have been USDJPY closing -0.47% lower and USDCAD losing -0.05%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been GBPPLN surging 0.81% and ZARJPY closing 0.78% higher. The worst performers of the day have been EURZAR tanking -1.42% and CHFZAR closing -1.28% lower. Read more