Based on a long-term analysis of historical data, the average positive and negative daily returns are approximately 1.04% and -1.08% , respectively. The estimated daily return in both directions based on their probability of occurrence is 0.53% and -0.51% . Friday´s return was -0.99% , which below the first standard deviation. Our scoring is currently neutral (0 ) for the month-on-month change and 0 for price indexation. Both scorings range from -3 up to 3 and are currently in the extreme of an ascending phase of the cycle. The development of the estimated cycles based on our analytical system 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. As we can see in the chart below, bearish sentiment currently only supports long-term MA. In the event of a decline, monthly and 6-month MAs can be the price support.
Since our last analysis , we have witnessed more upward trends. They did not exceed 4 days. The total maximum in the measured period (last 3 years) is 6 days. Downward trends did not exceed more than 2 days in the same period. However, the total maximum for the last 3 years is 7 days. We could use the average long-term ATR (Average True Range) obtained from daily data (3.10% ) to estimate Stop Loss orders for our positions. The current value is 3.27% , which is almost average. Approximately 90% confidence interval (return between -2.40% and 2.40% ) is shown in the histogram below by a red rectangle.
We could use the last decile of low to high returns (3.60% ) to estimate Profit Targets, as shown in the chart below.
Since the beginning of this year, the basic technical analysis has supported bullish sentiment, as XPT/USD have dynamically rebounded from an important area of the demand zone (green rectangle), where are the Fibonacci retracement level of 50.00% and the psychological level of 1 000.00 . However, the market price is currently testing the long-term moving average along with the 38.20% Fibonacci retracement level. In addition, there is a divergence between the price development and the RSI created since November.