GBPCHF runs into sellers again around 1.1876
British Pound/Swiss Franc (GBPCHF) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
GBPCHF ended the week 0.46% higher at 1.1814 after losing 46 pips (-0.39%) today on low volume. The bears were in full control today, moving the market lower throughout the whole session. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (GBPCHF as at May 22, 2020):
Friday's trading range has been 66 pips (0.56%), that's far below the last trading month's daily average range of 108 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for GBPCHF.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Bearish Short Candle showed up on April 20th, GBPCHF lost -0.95% on the following trading day.
Unable to break through the key technical resistance level at 1.1870 (R1), the forex pair closed below it after spiking up to 1.1876 earlier during the day. The failure to close above the resistance could increase that levels importance going forward. After having been unable to move above 1.1879 in the previous session, GBP/CHF ran into sellers again around the same price level today, missing to move higher than 1.1876.
The currency shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling might speed up should prices move below the nearby swing low at 1.1774 where further sell stops could get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for GBP/CHF. Out of 502 times, GBPCHF closed lower 52.99% 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 53.39% with an average market move of -0.18%.
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