AUDUSD breaks below Wednesday's low
Australian Dollar/US Dollar (AUDUSD) Technical Analysis Report for Feb 20, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, AUDUSD finished Thursday at 0.6613 tanking 64 pips (-0.96%) on high volume. This is the biggest single-day loss in over three weeks. Today's close at 0.6613 marks the lowest recorded closing price since March 16, 2009. The bears were in full control today, moving the market lower throughout the whole session. Closing below Wednesday's low at 0.6665, the pair confirmed its breakout through the previous session low after trading up to 55 pips below it intraday.
Daily Candlestick Chart (AUDUSD as at Feb 20, 2020):
Thursday's trading range has been 86 pips (1.29%), that's far above the last trading month's daily average range of 46 pips. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for AUDUSD.
One bearish candlestick pattern matches today's price action, the Black Candle.
Crossing below the lower Bollinger Band for the first time since January 31st, prices have shown unusually strong downward momentum in the short-term. This might either indicate a potential selling climax after which prices could head back up towards the mean of the Bollinger Bands at 0.6718 or signal the beginning of a strong momentum breakout leading to even lower prices. The last time prices broke out below the lower Bollinger Band on January 30th, AUDUSD lost -0.51% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Lower Closes" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for AUD/USD. Out of 154 times, AUDUSD closed higher 60.39% 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 55.19% with an average market move of 0.18%.
With three of the other Major FX Pairs closing higher and three closing lower today, the winners of the day are USDJPY surging 0.67% and USDCAD gaining 0.3%. On the flipside the worst performers have been NZDUSD closing -0.81% lower and GBPUSD losing -0.3%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been USDMXN surging 1.45% and USDZAR closing 0.97% higher. The worst performers of the day have been AUDCHF tanking -0.94% and AUDHKD closing -0.86% lower. Read more