In regards to the near term future, various signals were indicating that the exchange rate could decline.
Daily Candle Chart
On the daily candle chart, one can observe that the rate had been trading almost sideways since January 19.
During that time period, the exchange rate has made three attempts to surge above the 2.0500 level. Usually, three attempts to pass a price level with strong resistance results in a drop, as the bulls give up.
Meanwhile, it can be observed that volatility decreased throughout the last week, as the candles had become smaller. A decrease of volatility indicates that sideways trading is most likely going to end soon, and the exchange rate is about to make a move.
Market Depth
In the meantime, the market depth data gives guidance, as the buy and sell order clusters shown on the chart and data tables can be used for creating a trading strategy.
It could be observed on Monday, February 3, that the most close buy cluster of buy orders was located at 1.7600. At that level there were orders to buy 1006.00 DUK+ coins. In addition, the orders for 495.00 are at 1.7500.
Due to that reason, the rate has no support as low as that level. A minor exception was the 1.8500 level, where orders for 128.68 DUK+ had been set up.
Meanwhile, sell orders are more dispersed and far more numerous. Sell orders start at 1.9600 where 425.00 DUK+ could be sold. Next notable sell order cluster is at 2.0200 with 517.50 DUK+ to be sold.
Moreover, starting from 2.0200, at each level there are orders to sell at least 100.00 coins. In most cases, there are orders to sell 200 DUK+.
In addition, there is a cluster of sell orders at 2.2500 with 700 DUK+ to be sold.
© Dukascopy Bank SA
© Dukascopy Bank SA
© Dukascopy Bank SA
Future outlook
In general, the candle chart indicates that the sideways trading is about to end, and the market depth reveals the direction. One can expect that DUK+/EUR would decline as low as the 1.7500 level, where bulls would start buying it.
In the meantime, as the pair drops, the support of the daily simple moving averages could catch up. In that case the overbought pressure would be removed.