USDEUR closes within prior day's range after lackluster session
US Dollar/Euro (USDEUR) Technical Analysis Report for Oct 12, 2020 | by Techniquant Editorial Team
USDEUR ended Monday at 0.8465 gaining 10 pips (0.12%) on low volume. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (USDEUR as at Oct 12, 2020):
Monday's trading range has been 29 pips (0.34%), that's far below the last trading month's daily average range of 53 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for USDEUR.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, three candlestick patterns are matching today's price action, the Bullish Harami Cross Pattern and the Southern Doji which are both known as bullish patterns and one neutral pattern, the Doji. The last time a Southern Doji showed up on February 26th, USDEUR actually lost -1.10% on the following trading day.
Prices are trading close to the key technical resistance level at 0.8496 (R1). After having been unable to move lower than 0.8451 in the prior session, the pair found buyers again around the same price level today at 0.8455.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling could accelerate should prices move below the nearby swing low at 0.8451 where further sell stops might get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Though it is usually interpreted as neutral, it has actually shown to be bearish for USD/EUR. Out of 761 times, USDEUR closed lower 52.30% 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 three trading days, showing a win rate of 51.25% with an average market move of -0.02%.