CZKUSD breaks below Thursday's low
Czech Koruna/US Dollar (CZKUSD) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
CZKUSD finished the week 2.37% higher at 0.039960 after tanking 434 pips (-1.07%) today on low volume. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 0.040063, the currency confirmed its breakout through the previous session low after trading up to 268 pips below it intraday.
Daily Candlestick Chart (CZKUSD as at May 22, 2020):
Friday's trading range has been 614 pips (1.52%), that's above the last trading month's daily average range of 505 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 CZKUSD.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading as low as 0.039795 during the day, the forex pair found support at the 50-day moving average at 0.039823. Prices broke below the key technical support level at 0.040337 (now R1), which is likely to act as resistance going forward. The last time this happened on May 11th, CZKUSD actually gained 0.58% on the following trading day.
Though CZK/USD is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Among the seven 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/USD. Out of 533 times, CZKUSD closed higher 53.85% of the time on the next trading day after the market condition occurred.