CZKEUR breaks back below 20-day moving average
Czech Koruna/Euro (CZKEUR) Technical Analysis Report for Dec 04, 2019 | by Techniquant Editorial Team
CZKEUR finished Wednesday at 0.039122 tanking 69 pips (-0.18%). This is the biggest single-day loss in over three weeks. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (CZKEUR as at Dec 04, 2019):
Wednesday's trading range has been 135 pips (0.34%), that's above the last trading month's daily average range of 121 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CZKEUR. Prices continued to consolidate within a tight trading range between 0.039064 and 0.039223 where it has been caught now for the whole last trading week.
Prices are trading close to the key technical support level at 0.039042 (S1). The currency closed back below the 20-day moving average at 0.039154. After having been unable to move above 0.039222 in the prior session, the pair ran into sellers again around the same price level today, failing to move higher than 0.039218. The last time this happened on November 21st, CZKEUR actually gained 0.18% on the following trading day.
While the FX pair is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might accelerate should prices move above the nearby swing high at 0.039222 where further buy stops could get triggered. Further selling might move prices lower should the market test November's close-by low at 0.038979.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Strong Down Move" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for CZK/EUR. Out of 205 times, CZKEUR closed higher 59.51% 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 58.05% with an average market move of 0.10%.