USDEUR closes within previous day's range after lackluster session
US Dollar/Euro (USDEUR) Technical Analysis Report for Oct 14, 2020 | by Techniquant Editorial Team
USDEUR finished Wednesday at 0.8514 flat on low volume. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (USDEUR as at Oct 14, 2020):
Wednesday's trading range has been 37 pips (0.43%), that's below the last trading month's daily average range of 52 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.
Four candlestick patterns are matching today's price action, the Northern Doji which is known as bearish pattern and three neutral patterns, the Doji, the Long-Legged Doji and the Rickshaw-Man. The last time a Rickshaw-Man showed up on February 26th, USDEUR lost -1.10% on the following trading day.
After trading down to 0.8495 earlier during the day, the market bounced off the key technical support level at 0.8496 (S1). The failure to close below the support might increase that levels importance as support going forward. The FX pair closed back below the 20-day moving average at 0.8515.
USD/EUR shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
As prices are trading close to October's high at 0.8550, upside momentum could accelerate should the pair mark new highs for the month.
Among the six 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. While it is usually interpreted as bearish, it has actually shown to be bullish for USD/EUR. Out of 166 times, USDEUR closed higher 56.02% 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 56.02% with an average market move of 0.21%.