CZKEUR breaks below key technical support level
Czech Koruna/Euro (CZKEUR) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
CZKEUR ended the week 1.59% higher at 0.036656 after losing 230 pips (-0.62%) today. 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 May 22, 2020):
Friday's trading range has been 347 pips (0.94%), that's slightly above the last trading month's daily average range of 325 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 CZKEUR.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 0.036864 (now R1), which is likely to act as resistance going forward. After having been unable to move lower than 0.036572 in the prior session, the market found buyers again around the same price level today at 0.036551. The last time this happened on Tuesday, CZKEUR gained 0.66% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might speed up should prices move above the nearby swing high at 0.036927 where further buy stops could get triggered. As prices are trading close to May's high at 0.037117, upside momentum might accelerate should the FX pair mark new highs for the month.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for CZK/EUR. Out of 333 times, CZKEUR closed higher 57.06% 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 two trading days, showing a win rate of 56.16% with an average market move of 0.01%.