DKKUSD closes below its opening price unable to hold early session gains
Danish Krone/US Dollar (DKKUSD) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, DKKUSD ended the week -1.02% lower at 0.1450 after losing 1 pip (-0.07%) today. Today's close at 0.1450 marks the lowest recorded closing price since April 21, 2017. Trading 3 pips higher after the open, the market was unable to hold its gains as the bears took control ending the day below 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 (DKKUSD as at Feb 14, 2020):
Friday's trading range has been 6 pips (0.41%), that's slightly below the last trading month's daily average range of 7 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for DKKUSD.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After having been unable to move lower than 0.1449 in the previous session, the currency found buyers again around the same price level today at 0.1448.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and could now be heading back up towards the mean of the Bollinger Bands at 0.1472. The last time this happened on Tuesday, DKKUSD actually lost -0.41% on the following trading day.
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 Price Action based market condition "3 Consecutive Lower Closes" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for DKK/USD. Out of 140 times, DKKUSD closed higher 52.86% 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 10 trading days, showing a win rate of 50.71% with an average market move of 0.06%.