AUDGBP finds buyers again around 0.5438
Australian Dollar/British Pound (AUDGBP) Technical Analysis Report for Aug 04, 2020 | by Techniquant Editorial Team
AUDGBP ended Tuesday at 0.5479 gaining 31 pips (0.57%). Closing above Monday's high at 0.5462, the currency confirmed its breakout through the previous session high after trading up to 25 pips above it intraday.
Daily Candlestick Chart (AUDGBP as at Aug 04, 2020):
Tuesday's trading range has been 49 pips (0.9%), that's slightly above the last trading month's daily average range of 41 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for AUDGBP.
Regardless of a weak opening the FX pair managed to close above the prior day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
After having been unable to move lower than 0.5433 in the previous session, the pair found buyers again around the same price level today at 0.5438.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and could now be heading back up towards the mean of the Bollinger Bands at 0.5535. The last time this happened on March 13th, AUDGBP actually lost -1.35% on the following trading day.
Although AUD/GBP is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Engulfing Candle" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for AUD/GBP. Out of 144 times, AUDGBP closed lower 53.47% 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 58.33% with an average market move of -0.31%.