Based on a long-term analysis of historical data, the average positive and negative daily returns are approximately 1.47% and -1.53% , respectively. The estimated daily return in both directions based on their probability of occurrence is 0.75% and -0.70% . Friday´s return was 0.13% , well below the first standard deviation. Our scoring is currently neutral (0 ) for the month-on-month change and 0 for price indexation. It is currently in the extreme growth 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.
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 price of XPD/USD has strengthened over the last month. Therefore, all MAs still support bullish sentiment. The monthly MA could be an important support if the price falls.
After our analysis, we have witnessed more declining trends, with the maximum level reaching 5 consecutive days. The total maximum in the measured period (last 3 years) is the same. The upward trends did not exceed more than 3 days in the same period. However, the maximum in the measured period is 14 days. We could use the average long-term ATR (Average True Range) obtained from daily data (3.29% ) to estimate Stop Loss orders for our positions. The current value is 2.09% , which is below the average. Approximately 90% confidence interval (return between -3.0% and 3.0% ) is shown in the histogram below by a red rectangle.
We could use the last decile of low to high returns (5.25% ) to estimate Profit Targets, as shown in the chart below.
The basic technical analysis points to volatile development since the beginning of this year. The medium-term correction was replaced by short-term growth. XPD/USD is currently very close to the short-term moving average, which could be an important price support. In addition, it is also located in the demand zone (green rectangle), where is the psychological level of 2 750 . However, the divergence between the price development and the RSI could support the opposite scenario.