USDEUR breaks back below 20-day moving average
US Dollar/Euro (USDEUR) Technical Analysis Report for Jul 06, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, USDEUR ended Monday at 0.8843 losing 47 pips (-0.53%) on low volume. Closing below Friday's low at 0.8887, the pair confirmed its breakout through the prior session low after trading up to 73 pips below it intraday.
Daily Candlestick Chart (USDEUR as at Jul 06, 2020):
Monday's trading range has been 81 pips (0.91%), that's slightly above the last trading month's daily average range of 71 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for USDEUR.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 0.8808 (S1). The forex pair closed back below the 20-day moving average at 0.8879 for the first time since June 24th. When this moving average was crossed below the last time on June 22nd, USDEUR lost -0.41% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Further selling could move prices lower should the market test June's close-by low at 0.8755.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 20" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for USD/EUR. Out of 162 times, USDEUR closed higher 54.94% 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 55.56% with an average market move of 0.16%.