AUDGBP closes lower for the 4th day in a row
Australian Dollar/British Pound (AUDGBP) Technical Analysis Report for Jul 10, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, AUDGBP finished the week -0.99% lower at 0.5506 after losing 19 pips (-0.34%) today. Today's close at 0.5506 marks the lowest recorded closing price since June 17th. Closing below Thursday's low at 0.5512, the currency confirmed its breakout through the previous session low after trading up to 18 pips below it intraday.
Daily Candlestick Chart (AUDGBP as at Jul 10, 2020):
Friday's trading range has been 31 pips (0.56%), that's below 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 slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for AUDGBP.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Bearish Short Candle showed up on December 9, 2019, AUDGBP lost -0.29% on the following trading day.
Prices are trading close to the key technical resistance level at 0.5527 (R1).
Although the market is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
With prices trading close to this year's high at 0.5596, upside momentum might accelerate should AUD/GBP be able to break out to new highs for the year.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Short Candle" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for AUD/GBP. Out of 61 times, AUDGBP closed higher 57.38% 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 57.38% with an average market move of 0.34%.