CHFAUD declines to lowest close since January 24th
Swiss Franc/Australian Dollar (CHFAUD) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
CHFAUD finished the week -1.08% lower at 1.5163 after losing 30 pips (-0.2%) today on low volume. Today's close at 1.5163 marks the lowest recorded closing price since January 24th. Trading 23 pips higher after the open, the forex pair was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (CHFAUD as at Feb 14, 2020):
Friday's trading range has been 67 pips (0.44%), that's far below the last trading month's daily average range of 124 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CHFAUD.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, three candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and two bearish patterns, the Bearish Short Candle and the Black Candle.
Prices broke below the key technical support level at 1.5172 (now R1), which is likely to act as resistance going forward. The last time this happened on February 4th, CHFAUD lost -0.55% on the following trading day. The market found buyers again today around 1.5154 for the third trading day in a row after having found demand at 1.5149 in the previous session and at 1.5168 two days ago.
Although CHF/AUD is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could accelerate should prices move below the nearby swing low at 1.5149 where further sell stops might get activated.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Support S1" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for CHF/AUD. Out of 380 times, CHFAUD closed higher 55.79% 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 60.79% with an average market move of 0.58%.