The current price of the EUR/USD exchange rate is 1.1901 (March 09, 2021). The decline of this pair has slowed down today, and we will look at statistical and technical analysis.
The average positive and negative daily returns are approximately 0.44% and -0.45%, respectively. Yesterday´s return was -0.60%. Our scoring is currently -1 for the month-on-month change and -1 for price indexation. The estimated cycles development based on our analytical systems is shown in the following chart.
Different moving averages (MAs) help us better identify trends across multiple time frames. We use 3 basic MAs to find out which sentiment dominates each horizon. The purple line represents the monthly, the green line the 6 months and the yellow line the annual moving average. EUR/USD is in bearish sentiment in the case of monthly and 6-month MAs and still in bullish sentiment according to the annual MA, as we can see in the chart below.
There have been upward and downward trends that have not exceeded more than 3 consecutive days since November. To estimate Stop Loss orders for our positions, we could use the average long-term ATR (Average True Range), obtained from daily data. The current value is 0.76% . Approximately 90% confidence interval (return between -1% and 1%) is shown in the histogram below by a red rectangle. To estimate Profit Targets, we could use the last decile of low to high returns (1.25%), which is shown in the second chart below.
Basic technical analysis supports bearish sentiment after a day at high volumes (red ellipse). However, EUR/USD is currently in the demand zone (green rectangle) with a strong bottom, where the Fibonacci retracement level of 38.20% is. In addition, the longer-term MA is also close to the exchange rate. The divergence between price development and RSI could also motivate short-term bulls and bring the upward rebound to a psychological level of 1.2000.