AUDCHF closes within previous day's range after lackluster session
Australian Dollar/Swiss Franc (AUDCHF) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
AUDCHF ended the week 1.88% higher at 0.6349 after losing 22 pips (-0.35%) today on low volume. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (AUDCHF as at May 22, 2020):
Friday's trading range has been 59 pips (0.93%), that's below the last trading month's daily average range of 78 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for AUDCHF. Prices continued to consolidate within a tight trading range between 0.6321 and 0.6387 where it has been caught now for the last three trading days.
In spite of a strong opening the market closed below the previous day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on May 15th, AUDCHF actually gained 1.67% on the following trading day.
Prices are trading close to the key technical resistance level at 0.6387 (R1). The forex pair was bought again around 0.6321 after having seen lows at 0.6327, 0.6324 and 0.6328 in the last three trading sessions. Obviously there is something going on at that level.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could accelerate should prices move above the nearby swing high at 0.6387 where further buy stops might get activated. Further buying could move prices higher should the market test April's close-by high at 0.6403.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior three Highs" stand out. Its common bearish interpretation has been confirmed for AUD/CHF. Out of 30 times, AUDCHF closed lower 60.00% 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 60.00% with an average market move of -0.75%.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are GBPUSD losing -0.47% and EURUSD closing -0.44% lower. On the flipside the best performers have been USDCAD closing 0.33% higher and USDCHF gaining 0.08%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDCZK surging 1.09% and USDHUF closing 0.9% higher. The worst performers of the day have been USDMXN tanking -0.58% and SGDHKD closing -0.51% lower. Read more