GBPEUR runs into sellers again around 1.2050
British Pound/Euro (GBPEUR) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving higher for the 5th day in a row, GBPEUR finished the week 2.31% higher at 1.2045 after gaining 13 pips (0.11%) today. Today's close at 1.2045 marks the highest recorded closing price since June 29, 2016. Trading up to 47 pips lower after the open, the forex pair managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (GBPEUR as at Feb 14, 2020):
Friday's trading range has been 65 pips (0.54%), 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 way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for GBPEUR.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Hanging Man. The last time a Hanging Man showed up on December 12, 2019, GBPEUR actually gained 1.32% on the following trading day.
Prices are trading close to the key technical resistance level at 1.2054 (R1). After having been unable to move above 1.2054 in the previous session, the market ran into sellers again around the same price level today, missing to move higher than 1.2050.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day though might signal a potential change in momentum that could lead to a correction back down towards the center of the Bollinger Bands at 1.1848.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 1.2054 where further buy stops could get activated. 2019's high at 1.2082 is within reach and we might see further upside momentum should the pair manage to break out beyond.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for GBP/EUR. Out of 67 times, GBPEUR closed higher 53.73% 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 three trading days, showing a win rate of 61.19% with an average market move of 0.06%.