DKKUSD finds buyers at key support level
Danish Krone/US Dollar (DKKUSD) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
DKKUSD finished the month 1.14% higher at 0.1507 after edging lower 2 pips (-0.13%) today on low volume. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (DKKUSD as at Jun 30, 2020):
Tuesday's trading range has been 10 pips (0.66%), that's below the last trading month's daily average range of 13 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for DKKUSD. Prices continued to consolidate within a tight trading range between 0.1501 and 0.1515 where it has been caught now for the last three trading days.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on June 17th, DKKUSD lost -0.33% on the following trading day.
After trading down to 0.1501 earlier during the day, DKK/USD bounced off the key technical support level at 0.1504 (S1). The failure to close below the support could increase that levels significance as support going forward.
Though the pair is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the close-by swing high at 0.1515 where further buy stops might get triggered. Selling could speed up should prices move below the nearby swing low at 0.1501 where further sell stops might get activated. As prices are trading close to June's low at 0.1489, downside momentum could accelerate should the market mark new lows for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for DKK/USD. Out of 699 times, DKKUSD closed higher 51.22% 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 48.93% with an average market move of 0.02%.