SGDEUR closes below its opening price unable to hold early session gains
Singapore Dollar/Euro (SGDEUR) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, SGDEUR ended the week -0.59% lower at 0.6437 after losing 5 pips (-0.08%) today. Today's close at 0.6437 marks the lowest recorded closing price since May 1st. Trading 10 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. The last time this happened on April 30th, SGDEUR lost -0.60% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (SGDEUR as at May 22, 2020):
Friday's trading range has been 22 pips (0.34%), that's far below the last trading month's daily average range of 37 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 SGDEUR.
Prices are trading close to the key technical support level at 0.6423 (S1). After having been unable to move above 0.6451 in the previous session, the forex pair ran into sellers again around the same price level today, missing to move higher than 0.6454.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might accelerate should prices move above the nearby swing high at 0.6466 where further buy stops could get activated. Selling might speed up should prices move below the close-by swing low at 0.6423 where further sell stops could get triggered. As prices are trading close to May's low at 0.6414, downside momentum might accelerate should the FX pair mark new lows for the month.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for SGD/EUR. Out of 165 times, SGDEUR closed higher 54.55% 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 54.55% with an average market move of 0.17%.