FXB dominated by bears dragging the market lower throughout the day
CurrencyShares British Pound Ster ETF (FXB) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
FXB ended the month 5.59% higher at 126.69 after edging lower $0.03 (-0.02%) today. The bears were in full control today, moving the market lower throughout the whole session. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (FXB as at Jul 31, 2020):
Friday's trading range has been $0.72 (0.57%), that's far above the last trading month's daily average range of $0.54. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for FXB.
Two candlestick patterns are matching today's price action, the Bearish Closing Marubozu and the Black Candle which are both known as bearish patterns. The last time a Black Candle showed up on July 15th, FXB lost -0.32% on the following trading day.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day though could signal a potential change in momentum that might lead to a correction back down towards the center of the Bollinger Bands at 123.10.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
With prices trading close to this year's high at 128.00, upside momentum could accelerate should the ETF be able to break out to new highs for the year.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Closing Marubozu" stand out. Its common bearish interpretation has been confirmed for FXB. Out of 47 times, FXB closed lower 59.57% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 68.09% with an average market move of -0.50%.