AUDGBP breaks below 20-day moving average for the first time since April 6th


Australian Dollar/British Pound (AUDGBP) Technical Analysis Report for Jul 09, 2020 | by Techniquant Editorial Team

Highlights

AUDGBP breaks below 20-day moving average for the first time since April 6th
AUDGBP falls to lowest close since June 18th
AUDGBP closes lower for the 3rd day in a row
AUDGBP runs into sellers again around 0.5540
AUDGBP closes within previous day's range after lackluster session

Overview

Moving lower for the 3rd day in a row, AUDGBP ended Thursday at 0.5525 losing 11 pips (-0.2%). Today's close at 0.5525 marks the lowest recorded closing price since June 18th. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.

Daily Candlestick Chart (AUDGBP as at Jul 09, 2020):

Daily technical analysis candlestick chart for Australian Dollar/British Pound (AUDGBP) as at Jul 09, 2020

Thursday's trading range has been 28 pips (0.51%), that's far below the last trading month's daily average range of 47 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for AUDGBP.

One bullish candlestick pattern matches today's price action, the Last Engulfing Bottom Pattern.

The forex pair closed below the 20-day moving average at 0.5534 for the first time since April 6th. When this moving average was crossed below the last time on March 25th, AUDGBP lost -0.94% on the following trading day. After having been unable to move above 0.5545 in the previous session, the FX pair ran into sellers again around the same price level today, failing to move higher than 0.5540.

Although the currency is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.

Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Bottom Pattern" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for AUD/GBP. Out of 68 times, AUDGBP closed lower 51.47% 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 57.35% with an average market move of -0.29%.


Market Conditions for AUDGBP as at Jul 09, 2020

Loading Market Conditions for AUDGBP (Australian Dollar/British Pound)...
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