CHFGBP breaks below key technical support level
Swiss Franc/British Pound (CHFGBP) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 5th day in a row, CHFGBP finished the week -1.7% lower at 0.7803 after losing 25 pips (-0.32%) today on low volume. Today's close at 0.7803 marks the lowest recorded closing price since December 31, 2019. Closing below Thursday's low at 0.7817, the forex pair confirmed its breakout through the prior session low after trading up to 16 pips below it intraday.
Daily Candlestick Chart (CHFGBP as at Feb 14, 2020):
Friday's trading range has been 40 pips (0.51%), that's below the last trading month's daily average range of 54 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CHFGBP.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 0.7765 (S1). Prices broke below the key technical support level at 0.7821 (now R1), which is likely to act as resistance going forward.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day although could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 0.7894.
The currency shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
With prices trading close to this year's low at 0.7786, downside momentum could accelerate should the FX pair break out to new lows for the year.
Among the seven 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. Its common bearish interpretation has been confirmed for CHF/GBP. Out of 335 times, CHFGBP closed lower 52.54% of the time on the next trading day after the market condition occurred.