USDEUR breaks below Friday's low
US Dollar/Euro (USDEUR) Technical Analysis Report for Oct 19, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, USDEUR finished Monday at 0.8496 losing 39 pips (-0.46%). Closing below Friday's low at 0.8514, the pair confirmed its breakout through the previous session low after trading up to 35 pips below it intraday.
Daily Candlestick Chart (USDEUR as at Oct 19, 2020):
Monday's trading range has been 66 pips (0.77%), that's far above the last trading month's daily average range of 49 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for USDEUR.
Two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern and one bearish pattern, the Black Candle.
The FX pair closed back below the 20-day moving average at 0.8524. After having been unable to move above 0.8551 in the prior session, the market ran into sellers again around the same price level today, failing to move higher than 0.8545. The last time this happened on October 16th, USDEUR lost -0.46% on the following trading day.
Though the Dollar is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Selling might speed up should prices move below the nearby swing low at 0.8451 where further sell stops could get activated. As prices are trading close to October's low at 0.8451, downside momentum might accelerate should USD/EUR mark new lows for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Hikkake Pattern" stand out. Its common bullish interpretation has been confirmed for USD/EUR. Out of 126 times, USDEUR closed higher 53.97% 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 60.32% with an average market move of 0.28%.