CZKUSD closes higher for the 2nd day in a row
Czech Koruna/US Dollar (CZKUSD) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, CZKUSD finished the month 2.19% higher at 0.042120 after gaining 138 pips (0.33%) today. Trading up to 255 pips lower after the open, CZK/USD 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 missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (CZKUSD as at Jun 30, 2020):
Tuesday's trading range has been 565 pips (1.35%), that's slightly above the last trading month's daily average range of 550 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 notably lower than usual for CZKUSD. Prices continued to consolidate within a tight trading range between 0.041722 and 0.042287 where it has been caught now for the last three trading days.
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. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
After trading down to 0.041722 earlier during the day, the forex pair bounced off the key technical support level at 0.041780 (S1). The failure to close below the support might increase that levels importance as support going forward. After spiking up to 0.042287 during the day, the market found resistance at the 20-day moving average at 0.042266. The last time this happened on May 13th, CZKUSD lost -0.61% on the following trading day.
The currency 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 nearby swing high at 0.042633 where further buy stops might get triggered. Selling could accelerate should prices move below the close-by swing low at 0.041664 where further sell stops might get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Spinning Top" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for CZK/USD. Out of 302 times, CZKUSD closed lower 53.64% 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 53.64% with an average market move of -0.22%.