AUDGBP closes higher for the 2nd day in a row
Australian Dollar/British Pound (AUDGBP) Technical Analysis Report for Aug 12, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, AUDGBP ended Wednesday at 0.5496 gaining 22 pips (0.4%). Closing above Tuesday's high at 0.5490, the pair confirmed its breakout through the previous session high after trading up to 12 pips above it intraday.
Daily Candlestick Chart (AUDGBP as at Aug 12, 2020):
Wednesday's trading range has been 45 pips (0.82%), that's slightly above the last trading month's daily average range of 43 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 higher than usual for AUDGBP. Prices continued to consolidate within a tight trading range between 0.5449 and 0.5513 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. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
After trading down to 0.5457 earlier during the day, the forex pair bounced off the key technical support level at 0.5458 (S1). The failure to close below the support could increase that levels significance as support going forward. When prices bounced off a significant support level the last time on July 29th, AUDGBP actually lost -0.65% on the following trading day. After having been unable to move lower than 0.5462 in the prior session, AUD/GBP found buyers again around the same price level today at 0.5457.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying might speed up should prices move above the close-by swing high at 0.5513 where further buy stops could get triggered.
Among the nine 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 52.94% 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%.