USDEUR closes within previous day's range after lackluster session
US Dollar/Euro (USDEUR) Technical Analysis Report for Oct 16, 2020 | by Techniquant Editorial Team
USDEUR ended the week 0.95% higher at 0.8535 after edging lower 7 pips (-0.08%) today. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (USDEUR as at Oct 16, 2020):
Friday's trading range has been 37 pips (0.43%), that's below the last trading month's daily average range of 51 pips. Weekly volatility is also lower, being slightly 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 prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. After moving higher in the previous session, the forex pair closed lower but above the prior day's open today, forming a bearish Harami Candle. Additionally, two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Hanging Man which are both known as bearish patterns.
After having been unable to move above 0.8556 in the previous session, USD/EUR ran into sellers again around the same price level today, failing to move higher than 0.8551. The last time this happened on October 8th, USDEUR lost -0.56% on the following trading day.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the close-by swing high at 0.8556 where further buy stops might get triggered. Further buying could move prices higher should the market test September's nearby high at 0.8612.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. Its common bearish interpretation has been confirmed for USD/EUR. Out of 41 times, USDEUR closed lower 51.22% 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 56.10% with an average market move of 0.04%.