DKKUSD closes below its opening price unable to hold early session gains
Danish Krone/US Dollar (DKKUSD) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, DKKUSD ended Wednesday at 0.1588 losing 4 pips (-0.25%). Trading 5 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 below Tuesday's low at 0.1591, the currency confirmed its breakout through the previous session low after trading up to 7 pips below it intraday.
Daily Candlestick Chart (DKKUSD as at Sep 16, 2020):
Wednesday's trading range has been 13 pips (0.82%), that's slightly above the last trading month's daily average range of 12 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DKKUSD.
The forex pair closed back below the 20-day moving average at 0.1591 for the first time since September 10th. When this moving average was crossed below the last time on September 7th, DKKUSD lost -0.38% on the following trading day.
Although DKK/USD is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could accelerate should prices move below the nearby swing low at 0.1579 where further sell stops might get activated. Further selling could move prices lower should the market test August's close-by low at 0.1571.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 20" stand out. Its common bearish interpretation has been confirmed for DKK/USD. Out of 164 times, DKKUSD closed lower 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 short side has been after 10 trading days, showing a win rate of 53.66% with an average market move of -0.08%.