What kind of literary technique is used in this quote? "Those days are ill-defined in my memory, running together and combining like a fresh watercolor painting left out in the rain."

I think it's a simile

The person above me is correct - this quite indeed uses the literary technique known as simile.

When you are comparing two things using words such as like or as, such as in this example ("like a fresh watercolor painting left out in the rain"), then it is a simile.