GBPUSD breaks below key technical support level
British Pound/US Dollar (GBPUSD) Technical Analysis Report for May 17, 2019 | by Techniquant Editorial Team
Moving lower for the 10th day in a row, GBPUSD finished the week -2.16% lower at 1.2719 after losing 79 pips (-0.62%) today. Today's close at 1.2719 marks the lowest recorded closing price since January 8th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 1.2788, the market confirmed its breakout through the prior session low after trading up to 74 pips below it intraday.
Daily Candlestick Chart (GBPUSD as at May 17, 2019):
Friday's trading range has been 86 pips (0.67%), that's slightly above the last trading month's daily average range of 81 pips. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for GBPUSD.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 1.2773 (now R1), which is likely to act as resistance going forward. The last time this happened on Wednesday, GBPUSD lost -0.34% on the following trading day.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day though might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 1.2963.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "10 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for GBP/USD. Out of 1 times, GBPUSD closed higher 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 long side has been after 10 trading days, showing a win rate of 100.00% with an average market move of 2.61%.
With three of the other Major FX Pairs closing higher and three closing lower today, the winners of the day are USDJPY surging 0.2% and USDCHF gaining 0.1%. On the flipside the worst performers have been AUDUSD closing -0.35% lower and NZDUSD losing -0.28%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been USDZAR surging 0.95% and CHFZAR closing 0.85% higher. The worst performers of the day have been ZARJPY tanking -0.78% and GBPCAD closing -0.62% lower. Read more