USDEUR dominated by bulls lifting the market higher throughout the day
US Dollar/Euro (USDEUR) Technical Analysis Report for Oct 22, 2020 | by Techniquant Editorial Team
USDEUR finished Thursday at 0.8461 gaining 29 pips (0.34%). The bulls were in full control today, moving the market higher throughout the whole session. Closing above Wednesday's high at 0.8459, the forex pair confirmed its breakout through the previous session high after trading up to 8 pips above it intraday.
Daily Candlestick Chart (USDEUR as at Oct 22, 2020):
Thursday's trading range has been 40 pips (0.47%), that's below 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 above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for USDEUR.
Notwithstanding a weak opening the FX pair managed to close above the prior day's open and close, forming a bullish Engulfing Candle. Additionally, two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns.
Prices are trading close to the key technical resistance level at 0.8496 (R1).
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and might now be heading back up towards the mean of the Bollinger Bands at 0.8508. The last time this happened on July 28th, USDEUR actually lost -0.64% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling could speed up should prices move below the nearby swing low at 0.8417 where further sell stops might get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Short Candle" stand out. Its common bullish interpretation has been confirmed for USD/EUR. Out of 81 times, USDEUR closed higher 50.62% 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 58.02% with an average market move of 0.17%.