CNHUSD breaks below Thursday's low
Chinese Yuan Renminbi/US Dollar (CNHUSD) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, CNHUSD ended the week -0.21% lower at 0.1399 after losing 3 pips (-0.21%) today on high volume. Today's close at 0.1399 marks the lowest recorded closing price since March 19th. Closing below Thursday's low at 0.1401, CNH/USD confirmed its breakout through the prior session low after trading up to 5 pips below it intraday.
Daily Candlestick Chart (CNHUSD as at May 22, 2020):
Friday's trading range has been 7 pips (0.5%), that's above the last trading month's daily average range of 6 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CNHUSD.
Prices broke below the key technical support level at 0.1401 (now R1), which is likely to act as resistance going forward. The last time this happened on May 11th, CNHUSD lost 0.00% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
2019's low at 0.1390 is within reach and we could see further downside momentum should the market break out beyond.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for CNH/USD. Out of 247 times, CNHUSD closed higher 46.15% 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 six trading days, showing a win rate of 48.58% with an average market move of 0.02%.