EURUSD closes below its opening price unable to hold early session gains
Euro/US Dollar (EURUSD) Technical Analysis Report for Nov 20, 2020 | by Techniquant Editorial Team
EURUSD ended the week 0.18% higher at 1.1856 after losing 18 pips (-0.15%) today. Trading 17 pips higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on Wednesday, EURUSD actually gained 0.17% on the following trading day. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (EURUSD as at Nov 20, 2020):
Friday's trading range has been 41 pips (0.35%), that's below the last trading month's daily average range of 78 pips. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for EURUSD. Prices continued to consolidate within a tight trading range between 1.1814 and 1.1894 where it has been caught now for the whole last trading week.
Even with a strong opening the Euro closed below the previous day's open and close, forming a bearish Engulfing Candle.
Prices are trading close to the key technical support level at 1.1816 (S1). Unable to break through the key technical resistance level at 1.1883 (R1), the Fiber closed below it after spiking up to 1.1891 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. The FX pair ran into sellers again today around 1.1891 for the third trading day in a row after having found sellers at 1.1883 in the prior session and at 1.1891 two days ago.
While the currency is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the close-by swing high at 1.1894 where further buy stops might get activated. Selling could speed up should prices move below the nearby swing low at 1.1816 where further sell stops might get triggered. As prices are trading close to November's high at 1.1920, upside momentum could accelerate should EUR/USD mark new highs for the month.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for EUR/USD. Out of 511 times, EURUSD closed lower 51.86% 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 54.01% with an average market move of -0.12%.
With six out of the other six Major FX Pairs closing higher today, the ones that stand out on the positive side are AUDUSD gaining 0.29% and NZDUSD closing 0.25% higher. None of the markets ended the day in the red. Looking at the Minor FX Pairs and Crosses, the winners of the day have been USDTRY surging 1.11% and EURTRY closing 0.86% higher. The worst performers of the day have been TRYJPY tanking -1.02% and USDMXN closing -0.48% lower. Read more