CHFUSD closes below its opening price unable to hold early session gains
Swiss Franc/US Dollar (CHFUSD) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
CHFUSD finished Wednesday at 1.0996 losing 16 pips (-0.15%). Trading 34 pips higher after the open, the currency was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Tuesday's low at 1.1002, the market confirmed its breakout through the previous session low after trading up to 26 pips below it intraday.
Daily Candlestick Chart (CHFUSD as at Sep 16, 2020):
Wednesday's trading range has been 68 pips (0.62%), that's slightly below the last trading month's daily average range of 75 pips. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CHFUSD.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on August 27th, CHFUSD actually gained 0.55% on the following trading day.
After trading as low as 1.0976 during the day, the FX pair found support at the 20-day moving average at 1.0990. Unable to break through the key technical resistance level at 1.1036 (R1), the forex pair closed below it after spiking up to 1.1044 earlier during the day. The failure to close above the resistance could increase that levels importance going forward. The pair ran into sellers again today around 1.1044 for the third trading day in a row after having found sellers at 1.1047 in the prior session and at 1.1040 two days ago.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 1.1047 where further buy stops could get triggered. With prices trading close to this year's high at 1.1112, upside momentum might speed up should CHF/USD be able to break out to new highs for the year.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for CHF/USD. Out of 528 times, CHFUSD closed lower 55.49% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 52.08% with an average market move of -0.04%.