CHFGBP breaks below Thursday's low
Swiss Franc/British Pound (CHFGBP) Technical Analysis Report for Mar 27, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, CHFGBP finished the week -3.13% lower at 0.8440 after losing 66 pips (-0.78%) today. Trading 60 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 below Thursday's low at 0.8501, the FX pair confirmed its breakout through the prior session low after trading up to 98 pips below it intraday.
Daily Candlestick Chart (CHFGBP as at Mar 27, 2020):
Friday's trading range has been 163 pips (1.92%), that's slightly below the last trading month's daily average range of 171 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for CHFGBP.
The market closed below the 20-day moving average at 0.8464 for the first time since February 25th. When this moving average was crossed below the last time on February 25th, CHFGBP actually gained 0.74% on the following trading day.
While the currency is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Lower Closes" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for CHF/GBP. Out of 68 times, CHFGBP closed higher 52.94% 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 51.47% with an average market move of 0.41%.