EURCZK finds buyers around 26.1567 for the forth day in a row
Euro/Czech Koruna (EURCZK) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, EURCZK ended the month -1.6% lower at 26.2431 after gaining 180 pips (0.07%) today. Trading up to 724 pips lower after the open, the FX pair managed to reverse during the session as bulls took control ending the day above 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 (EURCZK as at Jul 31, 2020):
Friday's trading range has been 1560 pips (0.59%), that's slightly above the last trading month's daily average range of 1384 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for EURCZK. Prices continued to consolidate within a tight trading range between 26.1567 and 26.3132 where it has been caught now for the last three trading days.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. Additionally, two candlestick patterns are matching today's price action, the Bullish High-Wave Candle and the Bullish Spinning Top which are both known as bullish patterns. The last time a Bullish High-Wave Candle showed up on April 2nd, EURCZK gained 0.89% on the following trading day.
Prices are trading close to the key technical resistance level at 26.3132 (R1). The currency was bought again around 26.1567 after having seen lows at 26.1738, 26.1733 and 26.1522 in the last three trading sessions. Obviously there is something going on at that level.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could speed up should prices move above the nearby swing high at 26.3132 where further buy stops might get activated. Selling could accelerate should prices move below the close-by swing low at 26.1522 where further sell stops might get triggered.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish High-Wave Candle" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for EUR/CZK. Out of 97 times, EURCZK closed lower 55.67% 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 61.86% with an average market move of -0.12%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are NZDUSD losing -1.04% and AUDUSD closing -0.72% lower. On the flipside the best performers have been USDJPY closing 1.12% higher and USDCHF gaining 0.48%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDZAR surging 1.87% and GBPZAR closing 1.79% higher. The worst performers of the day have been NZDCAD tanking -1.15% and NZDHKD closing -1.05% lower. Read more