CZKEUR breaks below Thursday's low
Czech Koruna/Euro (CZKEUR) Technical Analysis Report for Jul 03, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, CZKEUR ended the week 0.25% higher at 0.037481 after losing 119 pips (-0.32%) today on low volume. Closing below Thursday's low at 0.037509, the currency confirmed its breakout through the prior session low after trading up to 55 pips below it intraday.
Daily Candlestick Chart (CZKEUR as at Jul 03, 2020):
Friday's trading range has been 166 pips (0.44%), that's below the last trading month's daily average range of 247 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for CZKEUR.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns.
The pair closed back below the 20-day moving average at 0.037513. When this moving average was crossed below the last time on June 24th, CZKEUR actually gained 0.16% on the following trading day. CZK/EUR ran into sellers again today around 0.037620 for the third trading day in a row after having found sellers at 0.037636 in the previous session and at 0.037620 two days ago.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could speed up should prices move above the close-by swing high at 0.037636 where further buy stops might get activated. Further buying could move prices higher should the market test June's nearby high at 0.037769. Further selling might move prices lower should the market test June's close-by low at 0.037083.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for CZK/EUR. Out of 315 times, CZKEUR closed higher 59.05% 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 55.87% with an average market move of 0.02%.