CHFAUD finds buyers around 1.5674 for the forth day in a row
Swiss Franc/Australian Dollar (CHFAUD) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
CHFAUD finished the week -1.84% lower at 1.5751 after gaining 55 pips (0.35%) today on low volume. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (CHFAUD as at May 22, 2020):
Friday's trading range has been 146 pips (0.93%), that's below the last trading month's daily average range of 198 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for CHFAUD. Prices continued to consolidate within a tight trading range between 1.5657 and 1.5820 where it has been caught now for the last three trading days.
Notwithstanding a weak opening CHF/AUD managed to close above the previous day's open and close, forming a bullish Engulfing Candle. The last time this candlestick pattern showed up on May 15th, CHFAUD actually lost -1.64% on the following trading day.
Prices are trading close to the key technical support level at 1.5657 (S1). The market was bought again around 1.5674 after having seen lows at 1.5657, 1.5676 and 1.5647 in the last three trading sessions. Obviously there is something going on at that level.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Selling could speed up should prices move below the close-by swing low at 1.5657 where further sell stops might get triggered. Further selling could move prices lower should the market test April's nearby low at 1.5618.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior three Lows" stand out. Its common bullish interpretation has been confirmed for CHF/AUD. Out of 31 times, CHFAUD closed higher 58.06% 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 58.06% with an average market move of 0.66%.