DKKUSD closes below its opening price unable to hold early session gains
Danish Krone/US Dollar (DKKUSD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
DKKUSD finished the month 4.98% higher at 0.1582 after losing 9 pips (-0.57%) today on high volume. Trading 9 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. The last time this happened on July 16th, DKKUSD actually gained 0.39% on the following trading day. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (DKKUSD as at Jul 31, 2020):
Friday's trading range has been 21 pips (1.32%), that's far above the last trading month's daily average range of 12 pips. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for DKKUSD.
In spite of a strong opening the forex pair closed below the prior day's open and close, forming a bearish Engulfing Candle.
Prices broke below the key technical support level at 0.1583 (now R1), which is likely to act as resistance going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Support S1" stand out. Its common bearish interpretation has been confirmed for DKK/USD. Out of 370 times, DKKUSD closed lower 49.19% 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 51.89% with an average market move of -0.05%.