AUDGBP runs into sellers around 0.5417 for the third day in a row
Australian Dollar/British Pound (AUDGBP) Technical Analysis Report for May 29, 2020 | by Techniquant Editorial Team
AUDGBP ended the month 4.45% higher at 0.5401 after gaining 15 pips (0.28%) today on high volume. Trading up to 28 pips lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (AUDGBP as at May 29, 2020):
Friday's trading range has been 58 pips (1.08%), that's above the last trading month's daily average range of 45 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for AUDGBP. Prices continued to consolidate within a tight trading range between 0.5357 and 0.5419 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. The last time this happened on May 20th, AUDGBP actually lost -0.35% on the following trading day. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
Prices are trading close to the key technical resistance level at 0.5419 (R1). The FX pair ran into sellers again today around 0.5417 for the third trading day in a row after having found sellers at 0.5412 in the prior session and at 0.5419 two days ago.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the close-by swing high at 0.5419 where further buy 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 "Bullish Outside Bar" stand out. Its common bullish interpretation has been confirmed for AUD/GBP. Out of 136 times, AUDGBP closed higher 52.21% 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 55.88% with an average market move of 0.42%.