USDEUR breaks back above 50-day moving average
US Dollar/Euro (USDEUR) Technical Analysis Report for Apr 16, 2019 | by Techniquant Editorial Team
USDEUR ended Tuesday at 0.8864 gaining 18 pips (0.2%). The bulls were in full control today, moving the market higher throughout the whole session. Closing above Monday's high at 0.8851, the pair confirmed its breakout through the previous session high after trading up to 14 pips above it intraday.
Daily Candlestick Chart (USDEUR as at Apr 16, 2019):
Tuesday's trading range has been 26 pips (0.29%), that's below the last trading month's daily average range of 43 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for USDEUR.
Even with a weak opening the Dollar managed to close above the prior day's open and close, forming a bullish Engulfing Candle. Additionally, three candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns and one bearish pattern, the Bearish Hikkake Pattern. The last time a Bullish Short Candle showed up on February 8th, USDEUR gained 0.41% on the following trading day.
The FX pair managed to close back above the 50-day moving average at 0.8851. Prices are trading close to the key technical resistance level at 0.8868 (R1).
Although the currency is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might speed up should prices move above the nearby swing high at 0.8905 where further buy stops could get triggered. Selling might accelerate should prices move below the close-by swing low at 0.8831 where further sell stops could get activated.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Break through SMA 50" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for USD/EUR. Out of 106 times, USDEUR closed lower 60.38% 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 56.60% with an average market move of -0.21%.