USDEUR stuck within tight trading range
US Dollar/Euro (USDEUR) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
USDEUR ended the month -1.14% lower at 0.8902 after edging higher 7 pips (0.08%) today. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (USDEUR as at Jun 30, 2020):
Tuesday's trading range has been 57 pips (0.64%), that's below the last trading month's daily average range of 75 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for USDEUR. Prices continued to consolidate within a tight trading range between 0.8859 and 0.8936 where it has been caught now for the last three trading days.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
After trading down to 0.8879 earlier during the day, the currency bounced off the key technical support level at 0.8896 (S1). The failure to close below the support might increase that levels importance as support going forward. When prices bounced off a significant support level the last time on June 19th, USDEUR actually lost -0.75% on the following trading day.
Although the forex pair is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might accelerate should prices move above the nearby swing high at 0.8936 where further buy stops could get triggered. Selling might speed up should prices move below the close-by swing low at 0.8859 where further sell stops could get activated. As prices are trading close to June's high at 0.9009, upside momentum might accelerate should the market mark new highs for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for USD/EUR. Out of 505 times, USDEUR closed higher 52.28% 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 53.27% with an average market move of 0.11%.