USDEUR pushes through key technical resistance level
US Dollar/Euro (USDEUR) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
USDEUR ended the month -4.63% lower at 0.8490 after gaining 50 pips (0.59%) today on high volume. Trading up to 43 pips lower after the open, the Dollar managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (USDEUR as at Jul 31, 2020):
Friday's trading range has been 106 pips (1.26%), that's far above the last trading month's daily average range of 68 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for USDEUR.
Despite a weak opening the market managed to close above the previous day's open and close, forming a bullish Engulfing Candle. The last time this candlestick pattern showed up on July 16th, USDEUR actually lost -0.39% on the following trading day.
Buyers managed to take out the key technical resistance level at 0.8488 (now S1), which is likely to act as support going forward.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Engulfing Candle" stand out. Its common bullish interpretation has been confirmed for USD/EUR. Out of 132 times, USDEUR closed higher 49.24% 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 53.79% with an average market move of 0.20%.