CZKEUR closes within prior day's range
Czech Koruna/Euro (CZKEUR) Technical Analysis Report for Oct 16, 2020 | by Techniquant Editorial Team
CZKEUR ended the week -0.98% lower at 0.036656 after gaining 100 pips (0.27%) today. Trading up to 210 pips lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (CZKEUR as at Oct 16, 2020):
Friday's trading range has been 481 pips (1.32%), that's far above the last trading month's daily average range of 326 pips. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CZKEUR.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. The last time this happened on September 30th, CZKEUR gained 0.82% on the following trading day. Notwithstanding a weak opening CZK/EUR managed to close above the previous day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
After trading down to 0.036346 earlier during the day, the FX pair bounced off the key technical support level at 0.036406 (S1). The failure to close below the support could increase that levels significance as support going forward. Unable to break through the key technical resistance level at 0.036720 (R1), the pair closed below it after spiking up to 0.036827 earlier during the day. The failure to close above the resistance might increase that levels importance going forward.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Outside Bar" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for CZK/EUR. Out of 194 times, CZKEUR closed lower 59.79% 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 61.86% with an average market move of -0.08%.