CNHUSD closes within previous day's range after lackluster session
Chinese Yuan Renminbi/US Dollar (CNHUSD) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, CNHUSD finished the month 0.86% higher at 0.1414 after gaining 1 pip (0.07%) today on low volume. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (CNHUSD as at Jun 30, 2020):
Tuesday's trading range has been 4 pips (0.28%), that's below the last trading month's daily average range of 6 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for CNHUSD.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top. The last time a Bullish Spinning Top showed up on June 17th, CNHUSD actually lost -0.07% on the following trading day.
Unable to break through the key technical resistance level at 0.1416 (R1), the forex pair closed below it after spiking up to 0.1416 earlier during the day. The failure to close above the resistance might increase that levels significance going forward.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the close-by swing high at 0.1419 where further buy stops might get activated. Selling could accelerate should prices move below the nearby swing low at 0.1410 where further sell stops might get triggered. Trading close to April's high at 0.1421 we could see further upside momentum if potential buy stops at the level get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for CNH/USD. Out of 233 times, CNHUSD closed lower 50.64% 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 48.07% with an average market move of -0.09%.