AUDGBP breaks below Wednesday's low
Australian Dollar/British Pound (AUDGBP) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, AUDGBP finished Thursday at 0.4969 losing 47 pips (-0.94%). Closing below Wednesday's low at 0.5001, the forex pair confirmed its breakout through the previous session low after trading up to 42 pips below it intraday.
Daily Candlestick Chart (AUDGBP as at Mar 26, 2020):
Thursday's trading range has been 82 pips (1.63%), that's slightly below the last trading month's daily average range of 113 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for AUDGBP.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on March 12th, AUDGBP actually gained 1.87% on the following trading day.
Prices are trading close to the key technical support level at 0.4949 (S1). Prices are trading close to the key technical resistance level at 0.5042 (R1).
Though the market is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Selling could accelerate should prices move below the nearby swing low at 0.4911 where further sell stops might get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Although it is usually interpreted as neutral, it has actually shown to be bearish for AUD/GBP. Out of 712 times, AUDGBP closed lower 51.26% 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 55.90% with an average market move of -0.13%.