CNHUSD closes above its opening price after recovering from early selling pressure
Chinese Yuan Renminbi/US Dollar (CNHUSD) Technical Analysis Report for Jun 01, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, CNHUSD ended Monday at 0.1403 gaining 1 pip (0.07%) on high volume. Trading up to 4 pips lower after the open, the currency managed to reverse during the session as bulls took control ending the day above its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (CNHUSD as at Jun 01, 2020):
Monday's trading range has been 6 pips (0.43%), that's slightly 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 lower than usual for CNHUSD.
One bearish candlestick pattern matches today's price action, the Hanging Man.
After trading down to 0.1398 earlier during the day, the market bounced off the key technical support level at 0.1401 (S1). The failure to close below the support might increase that levels importance as support going forward. After spiking up to 0.1404 during the day, the pair found resistance at the 20-day moving average at 0.1403. The last time this happened on May 20th, CNHUSD lost -0.36% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for CNH/USD. Out of 63 times, CNHUSD closed higher 39.68% 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 10 trading days, showing a win rate of 65.08% with an average market move of 0.17%.