GBPEUR closes below its opening price unable to hold early session gains
British Pound/Euro (GBPEUR) Technical Analysis Report for Aug 05, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, GBPEUR finished Wednesday at 1.1053 losing 22 pips (-0.2%). Trading 27 pips higher after the open, the pair was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Tuesday's low at 1.1061, the forex pair confirmed its breakout through the prior session low after trading up to 22 pips below it intraday.
Daily Candlestick Chart (GBPEUR as at Aug 05, 2020):
Wednesday's trading range has been 57 pips (0.51%), that's below the last trading month's daily average range of 75 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for GBPEUR.
After trading as low as 1.1039 during the day, the currency found support at the 20-day moving average at 1.1049. Unable to break through the key technical resistance level at 1.1093 (R1), GBP/EUR closed below it after spiking up to 1.1096 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. When prices bounced off a significant resistance level the last time on July 21st, GBPEUR lost -0.36% on the following trading day.
The FX pair shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for GBP/EUR. Out of 334 times, GBPEUR closed higher 49.40% 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 10 trading days, showing a win rate of 54.49% with an average market move of 0.04%.