GBPUSD pushes through key technical resistance level
British Pound/US Dollar (GBPUSD) Technical Analysis Report for Oct 11, 2019 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, GBPUSD ended the week 2.56% higher at 1.2649 after surging 208 pips (1.67%) today on high volume. Today's close at 1.2649 marks the highest recorded closing price since June 28th. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Thursday's high at 1.2470, the currency confirmed its breakout through the prior session high after trading up to 237 pips above it intraday.
Daily Candlestick Chart (GBPUSD as at Oct 11, 2019):
Friday's trading range has been 299 pips (2.4%), that's far above the last trading month's daily average range of 118 pips. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for GBPUSD.
One bullish candlestick pattern matches today's price action, the White Candle.
Buyers managed to take out the key technical resistance level at 1.2503 (now S1), which is likely to act as support going forward. Unable to break through the key technical resistance level at 1.2662 (R1), the FX pair closed below it after spiking up to 1.2707 earlier during the day. The failure to close above the resistance could increase that levels significance going forward.
Crossing above the upper Bollinger Band for the first time since September 13th, 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 1.2383 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 13th, GBPUSD actually lost -0.58% on the following trading day.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed above the upper Bollinger Band" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for GBP/USD. Out of 85 times, GBPUSD closed lower 56.47% 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 55.29% with an average market move of -0.38%.
With five out of the other six Major FX Pairs closing higher today, the ones that stand out on the positive side are AUDUSD gaining 0.47% and USDJPY closing 0.44% higher. On the flipside the worst performer has been USDCAD closing -0.67% lower. Looking at the Minor FX Pairs and Crosses, the winners of the day have been ZARJPY surging 2.23% and GBPJPY closing 2.1% higher. The worst performers of the day have been CHFZAR tanking -1.88% and USDZAR closing -1.87% lower. Read more