USDEUR climbs to highest close since July 23rd
US Dollar/Euro (USDEUR) Technical Analysis Report for Sep 25, 2020 | by Techniquant Editorial Team
USDEUR ended the week 1.79% higher at 0.8597 after gaining 26 pips (0.3%) today. Today's close at 0.8597 marks the highest recorded closing price since July 23rd. 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 Sep 25, 2020):
Friday's trading range has been 54 pips (0.63%), that's slightly below the last trading month's daily average range of 58 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for USDEUR.
One bearish candlestick pattern matches today's price action, the Last Engulfing Top Pattern. The last time a Last Engulfing Top Pattern showed up on February 20th, USDEUR lost -0.57% on the following trading day.
After having been unable to move lower than 0.8557 in the previous session, the market found buyers again around the same price level today at 0.8558.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day though could signal a potential change in momentum that might lead to a correction back down towards the center of the Bollinger Bands at 0.8471.
While the pair is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Top Pattern" stand out. Its common bearish interpretation has been confirmed for USD/EUR. Out of 86 times, USDEUR closed lower 55.81% 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 59.30% with an average market move of -0.20%.