CZKUSD breaks above 50-day moving average for the first time since July 22nd
Czech Koruna/US Dollar (CZKUSD) Technical Analysis Report for Oct 11, 2019 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, CZKUSD ended the week 0.22% higher at 0.042780 after gaining 166 pips (0.39%) today on high volume. Today's close at 0.042780 marks the highest recorded closing price since September 13th. Closing above Thursday's high at 0.042685, the FX pair confirmed its breakout through the previous session high after trading up to 205 pips above it intraday.
Daily Candlestick Chart (CZKUSD as at Oct 11, 2019):
Friday's trading range has been 350 pips (0.82%), that's far above the last trading month's daily average range of 251 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CZKUSD.
CZK/USD managed to close above the 50-day moving average at 0.042778 for the first time since July 22nd. Unable to break through the key technical resistance level at 0.042856 (R1), the pair closed below it after spiking up to 0.042890 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. When prices bounced off a significant resistance level the last time on September 16th, CZKUSD actually gained 0.46% on the following trading day.
Although the currency is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Further buying could move prices higher should the market test September's nearby high at 0.042981.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Break through SMA 50" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for CZK/USD. Out of 107 times, CZKUSD closed lower 55.14% of the time on the next trading day after the market condition occurred.