USDEUR breaks back above 20-day moving average
US Dollar/Euro (USDEUR) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, USDEUR ended Wednesday at 0.8462 gaining 21 pips (0.25%). Trading up to 23 pips lower after the open, USD/EUR managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Tuesday's high at 0.8447, the currency confirmed its breakout through the prior session high after trading up to 36 pips above it intraday.
Daily Candlestick Chart (USDEUR as at Sep 16, 2020):
Wednesday's trading range has been 67 pips (0.79%), that's slightly above the last trading month's daily average range of 60 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for USDEUR.
The forex pair managed to close back above the 20-day moving average at 0.8446 for the first time since September 10th. When this moving average was crossed above the last time on September 4th, USDEUR gained 0.21% on the following trading day. Prices are trading close to the key technical resistance level at 0.8502 (R1).
While the market is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could accelerate should prices move above the close-by swing high at 0.8508 where further buy stops might get triggered. Selling could speed up should prices move below the nearby swing low at 0.8403 where further sell stops might get activated. Further buying could move prices higher should the market test August's close-by high at 0.8550.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Break through SMA 20" stand out. Its common bullish interpretation has been confirmed for USD/EUR. Out of 163 times, USDEUR closed higher 52.76% 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 52.15% with an average market move of 0.05%.