AUDGBP closes lower for the 2nd day in a row
Australian Dollar/British Pound (AUDGBP) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, AUDGBP finished the week -0.64% lower at 0.5146 after losing 6 pips (-0.12%) today on low volume. Trading 15 pips higher after the open, the FX pair was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on January 29th, AUDGBP lost -1.04% on the following trading day. Closing below Thursday's low at 0.5147, the currency confirmed its breakout through the previous session low after trading up to 4 pips below it intraday.
Daily Candlestick Chart (AUDGBP as at Feb 14, 2020):
Friday's trading range has been 24 pips (0.47%), that's far below the last trading month's daily average range of 46 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for AUDGBP.
Unable to break through the key technical resistance level at 0.5157 (R1), the market closed below it after spiking up to 0.5167 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. After having been unable to move lower than 0.5147 in the prior session, AUD/GBP found buyers again around the same price level today at 0.5143.
While the pair is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
With prices trading close to this year's low at 0.5062, downside momentum might speed up should the forex pair break out to new lows for the year.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Down Close Near Low of Period" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for AUD/GBP. Out of 508 times, AUDGBP closed higher 51.77% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 53.35% with an average market move of 0.14%.