CNHUSD finds support at 200-day moving average
Chinese Yuan Renminbi/US Dollar (CNHUSD) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, CNHUSD finished the week 0.21% higher at 0.1430 after losing 1 pip (-0.07%) today on low volume.
Daily Candlestick Chart (CNHUSD as at Feb 14, 2020):
Friday's trading range has been 3 pips (0.21%), that's far below the last trading month's daily average range of 6 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CNHUSD.
After trading as low as 0.1429 during the day, CNH/USD found support at the 200-day moving average at 0.1429. The last time this happened on June 23, 2017, CNHUSD actually lost -0.34% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could accelerate should prices move below the nearby swing low at 0.1426 where further sell stops might get triggered. With prices trading close to this year's low at 0.1424, downside momentum could speed up should the currency break out to new lows for the year.
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 200" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for CNH/USD. Out of 8 times, CNHUSD closed lower 62.50% 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 50.00% with an average market move of -0.13%.