STATISTICAL ANALYSIS
Based on a long-term analysis of historical data, the average positive and negative daily returns are approximately 1.48% and -1.54% , respectively. The estimated daily return in both directions based on their probability of occurrence is 0.75% and -0.71% . Yesterday´s return was -0.13% , well below the first standard deviation. Our scoring is currently neutral (0 ) for the month-on-month change and 3 for price indexation. It is currently in a very positive phase of the cycle. Both scorings range from -3 up to 3 . The development of the estimated cycles based on our analytical system is shown in the following chart.
Source: WALFIR
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. The XPD/USD rose again above the short-term MA this week. Therefore, as we can see in the chart below, only medium and long-term MAs currently support bearish sentiment.
Source: WALFIR
Since our last analysis , we have witnessed several upward trends (even the price is lower) with the maximum level reaching 5 consecutive days. The maximum for the last 3 years is 14 days. However, the downward trends have not exceeded more than 4 days in the last period. However, the maximum in the measured period is 6 days. We could use the average long-term ATR (Average True Range) obtained from daily data (3.58% ) to estimate Stop Loss orders for our positions. The current value is 2.19% , which is well below average. Approximately 90% confidence interval (return between -3.0% and 3.0% ) is shown in the histogram below by a red rectangle.
Source: WALFIR
We could use the last decile of low to high returns (5.25% ) to estimate Profit Targets, as shown in the chart below.
Source: WALFIR
TECHNICAL ANALYSIS
The basic technical analysis points to a short-term uptrend after rebounding from the psychological level of 1 600 . However, the market price is currently in the demand zone (green rectangle), where is also the Fibonacci retracement level of 23.60% , along with a short-term moving average, which could support the price. In addition, the bulls were motivated by the divergence between price developments and the RSI created in late September and mid-December.
Source: TradingView
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