CNHUSD finds buyers again around 0.1401
Chinese Yuan Renminbi/US Dollar (CNHUSD) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
CNHUSD finished Thursday at 0.1412 gaining 9 pips (0.64%). The bulls were in full control today, moving the market higher throughout the whole session. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (CNHUSD as at Mar 26, 2020):
Thursday's trading range has been 13 pips (0.93%), that's slightly above the last trading month's daily average range of 11 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 notably higher than usual for CNHUSD. Prices continued to consolidate within a tight trading range between 0.1396 and 0.1417 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Notwithstanding a weak opening CNH/USD managed to close above the previous day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the White Candle. The last time a White Candle showed up on Tuesday, CNHUSD actually lost -0.57% on the following trading day.
Prices are trading close to the key technical resistance level at 0.1417 (R1). After having been unable to move lower than 0.1400 in the prior session, the market found buyers again around the same price level today at 0.1401.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could speed up should prices move above the nearby swing high at 0.1417 where further buy stops might get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Up Close near high of period" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for CNH/USD. Out of 479 times, CNHUSD closed lower 44.68% 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 49.69% with an average market move of -0.05%.