EURCZK pushes through key technical resistance level
Euro/Czech Koruna (EURCZK) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
EURCZK ended the week -1.57% lower at 27.2810 after gaining 1705 pips (0.63%) today. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (EURCZK as at May 22, 2020):
Friday's trading range has been 2575 pips (0.95%), that's slightly above the last trading month's daily average range of 2427 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for EURCZK.
One bullish candlestick pattern matches today's price action, the White Candle. The last time a White Candle showed up on May 1st, EURCZK actually lost -0.54% on the following trading day.
Buyers managed to take out the key technical resistance level at 27.1269 (now S1), which is likely to act as support going forward. After having been unable to move lower than 27.0807 in the prior session, the FX pair found buyers again around the same price level today at 27.1015.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might speed up should prices move below the nearby swing low at 27.0807 where further sell stops could get triggered. As prices are trading close to May's low at 26.9420, downside momentum might accelerate should EUR/CZK mark new lows for the month.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Resistance R1" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for EUR/CZK. Out of 336 times, EURCZK closed lower 56.55% 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 two trading days, showing a win rate of 57.44% with an average market move of -0.03%.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are GBPUSD losing -0.47% and EURUSD closing -0.44% lower. On the flipside the best performers have been USDCAD closing 0.33% higher and USDCHF gaining 0.08%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDCZK surging 1.09% and USDHUF closing 0.9% higher. The worst performers of the day have been USDMXN tanking -0.58% and SGDHKD closing -0.51% lower. Read more