CHFUSD breaks below Friday's low
Swiss Franc/US Dollar (CHFUSD) Technical Analysis Report for Sep 21, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, CHFUSD finished Monday at 1.0934 losing 36 pips (-0.33%). Closing below Friday's low at 1.0969, CHF/USD confirmed its breakout through the prior session low after trading up to 65 pips below it intraday.
Daily Candlestick Chart (CHFUSD as at Sep 21, 2020):
Monday's trading range has been 101 pips (0.92%), that's far above the last trading month's daily average range of 73 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CHFUSD.
After trading as low as 1.0904 during the day, the market found support at the 50-day moving average at 1.0925. The last time this happened on March 31st, CHFUSD actually lost -0.48% on the following trading day. Prices broke below the key technical support level at 1.0941 (now R1), which is likely to act as resistance going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Further selling might move prices lower should the market test August's nearby low at 1.0820.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 50" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for CHF/USD. Out of 82 times, CHFUSD closed lower 51.22% 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 four trading days, showing a win rate of 54.88% with an average market move of 0.02%.