GBPUSD pushes through Thursday's high
British Pound/US Dollar (GBPUSD) Technical Analysis Report for Jan 11, 2019 | by Techniquant Editorial Team
GBPUSD ended the week 0.94% higher at 1.2843 after surging 91 pips (0.71%) today. This is the biggest single-day gain in over a month. Today's close at 1.2843 marks the highest recorded closing price since November 22, 2018. Closing above Thursday's high at 1.2802, the pair confirmed its breakout through the previous session high after trading up to 64 pips above it intraday.
Daily Candlestick Chart (GBPUSD as at Jan 11, 2019):
Friday's trading range has been 157 pips (1.23%), that's far above the last trading month's daily average range of 105 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 higher than usual for GBPUSD.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. Additionally, two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Last Engulfing Top Pattern.
The currency managed to close back above the 50-day moving average at 1.2776. Prices are trading close to the key technical resistance level at 1.2928 (R1). The FX pair found buyers again today around 1.2709 for the third trading day in a row after having found demand at 1.2728 in the prior session and at 1.2711 two days ago.
Crossing above the upper Bollinger Band for the first time since September 20, 2018, prices have shown unusually strong upward momentum in the short-term. This might either indicate a potential buying climax after which prices could head back down towards the mean of the Bollinger Bands at 1.2685 or signal the beginning of a strong momentum breakout leading to even higher prices. The last time prices broke out above the upper Bollinger Band on September 20, 2018, GBPUSD actually lost -1.46% on the following trading day.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the 16 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Top Pattern" stand out. Its common bearish interpretation has been confirmed for GBP/USD. Out of 73 times, GBPUSD closed lower 53.42% 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 54.79% with an average market move of -0.26%.
With four out of the other six Major FX Pairs closing higher today, the ones that stand out on the positive side are NZDUSD gaining 0.69% and AUDUSD closing 0.4% higher. On the flipside the worst performers have been EURUSD closing -0.27% lower and USDCHF losing -0.09%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been NZDCAD surging 0.98% and GBPCAD closing 0.97% higher. The worst performers of the day have been EURNZD tanking -1.04% and EURGBP closing -0.99% lower. Read more