CHFEUR closes within previous day's range after lackluster session
Swiss Franc/Euro (CHFEUR) Technical Analysis Report for Aug 14, 2020 | by Techniquant Editorial Team
CHFEUR ended the week -0.1% lower at 0.9289 after losing 16 pips (-0.17%) today on low volume. 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 (CHFEUR as at Aug 14, 2020):
Friday's trading range has been 27 pips (0.29%), that's far below the last trading month's daily average range of 48 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently strongly lower than usual for CHFEUR. Prices continued to consolidate within a tight trading range between 0.9265 and 0.9315 where it has been caught now for the whole last trading week.
Prices are trading close to the key technical support level at 0.9264 (S1). The currency closed back below the 20-day moving average at 0.9291. When this moving average was crossed below the last time on Tuesday, CHFEUR actually gained 0.15% on the following trading day. The forex pair was sold again around 0.9310 after having seen highs at 0.9308, 0.9313 and 0.9315 in the last three trading sessions. Obviously there is something going on at that level.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could accelerate should prices move above the nearby swing high at 0.9315 where further buy stops might get activated. Selling could speed up should prices move below the close-by swing low at 0.9267 where further sell stops might get triggered. As prices are trading close to August's low at 0.9227, downside momentum could accelerate should the FX pair mark new lows for the month.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 20" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for CHF/EUR. Out of 181 times, CHFEUR closed higher 57.46% 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 56.35% with an average market move of 0.15%.