AUDGBP breaks below Monday's low
Australian Dollar/British Pound (AUDGBP) Technical Analysis Report for Jul 07, 2020 | by Techniquant Editorial Team
AUDGBP finished Tuesday at 0.5538 tanking 44 pips (-0.79%). This is the biggest single-day loss in over three weeks. The last time we've seen such an unusually strong single-day loss on June 11th, AUDGBP actually gained 0.68% on the following trading day. The bears were in full control today, moving the market lower throughout the whole session. Closing below Monday's low at 0.5554, the pair confirmed its breakout through the prior session low after trading up to 21 pips below it intraday.
Daily Candlestick Chart (AUDGBP as at Jul 07, 2020):
Tuesday's trading range has been 57 pips (1.02%), that's slightly above the last trading month's daily average range of 50 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for AUDGBP.
Notwithstanding a strong opening AUD/GBP closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 0.5527 (S1). After having been unable to move above 0.5591 in the prior session, the forex pair ran into sellers again around the same price level today, missing to move higher than 0.5590.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could speed up should prices move below the nearby swing low at 0.5527 where further sell stops might get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Very Strong Down Move" stand out. Its common bearish interpretation has been confirmed for AUD/GBP. Out of 124 times, AUDGBP closed lower 52.42% 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 56.45% with an average market move of -0.24%.