Based on a long-term analysis of historical data, the average positive and negative daily returns are approximately 1.27% and -1.22% , respectively. The estimated daily return in both directions based on their probability of occurrence is 0.64% and -0.59% . Today´s return is -0.40% , which is well below the first standard deviation. Our scoring is currently negative (-1 ) for the month-on-month change and -1 for price indexation. This means that we are in the middle of the negative phase of the cycle. Both scorings range from -3 up to 3 . The development of the estimated cycles 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. XCU/USD fell below short-term and medium-term MAs last week. Therefore, as we can see in the chart below, the monthly MA can only be a support for the price.
Since our last analysis, we have witnessed more downward trends that did not exceed 3 consecutive days. The total maximum in the measured period (last 3 years) is 12 days. The upward trends in recent months have not exceeded more than 2 days. The total maximum for the last 3 years is 14 days. We could use the average long-term ATR (Average True Range) obtained from daily data (1.88% ) to estimate Stop Loss orders for our positions. The current value is 1.21% , which is below average. Approximately 90% confidence interval (return between -2.5% and 2.5% ) is shown in the histogram below by a red rectangle.
We could use the last decile of low to high returns (3.00% ) to estimate Profit Targets, as shown in the chart below.
The basic technical analysis points to a sideways trending since March this year. The channel ranges from approximately 4.000 USD up to 4.800 USD . The lower boundary of channel is formed by the psychological level and the demand zone (green rectangle). The upper limit of channel is also formed by the psychological level and the supply zone (red rectangle). The XCU/USD is currently below the short-term and long-term moving averages, which could act as resistances. However, divergence between price development and the RSI could support the bulls. In addition, volumes have slowed in recent days.