CHFUSD breaks back below 20-day moving average
Swiss Franc/US Dollar (CHFUSD) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, CHFUSD ended the week 0.05% higher at 1.0297 after losing 8 pips (-0.08%) 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 (CHFUSD as at May 22, 2020):
Friday's trading range has been 37 pips (0.36%), that's far below the last trading month's daily average range of 66 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CHFUSD.
Two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern and the Hammer which are both known as bullish patterns. The last time a Hammer showed up on May 14th, CHFUSD gained 0.16% on the following trading day.
Prices are trading close to the key technical support level at 1.0266 (S1). CHF/USD closed back below the 20-day moving average at 1.0299 for the first time since May 15th.
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 1.0245 where further sell stops might get activated. Further selling could move prices lower should the market test April's nearby low at 1.0201.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hammer" stand out. Its common bullish interpretation has been confirmed for CHF/USD. Out of 33 times, CHFUSD closed higher 54.55% 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 72.73% with an average market move of 1.16%.