GBPPLN closes below its opening price unable to hold early session gains
British Pound/Polish Zloty (GBPPLN) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
GBPPLN ended the week -1.48% lower at 5.0367 after edging higher 3 pips (0.01%) today. Trading 192 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 within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (GBPPLN as at May 22, 2020):
Friday's trading range has been 239 pips (0.47%), that's far below the last trading month's daily average range of 412 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for GBPPLN.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, five candlestick patterns are matching today's price action, the Bullish Harami Cross Pattern, the Homing Pigeon and the Southern Doji which are known as bullish patterns, one bearish pattern, the Gravestone Doji and one neutral pattern, the Doji. The last time a Gravestone Doji showed up on March 12th, GBPPLN lost -1.58% on the following trading day.
Prices are trading close to the key technical support level at 5.0268 (S1). After having been unable to move lower than 5.0268 in the prior session, the currency found buyers again around the same price level today at 5.0325.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and might now be heading back up towards the mean of the Bollinger Bands at 5.1601.
While GBP/PLN is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might speed up should prices move below the close-by swing low at 5.0268 where further sell stops could get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Homing Pigeon" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for GBP/PLN. Out of 8 times, GBPPLN closed lower 100.00% 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 50.00% with an average market move of -0.06%.
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