GBPUSD finds buyers at key support level
British Pound/US Dollar (GBPUSD) Technical Analysis Report for Jan 23, 2020 | by Techniquant Editorial Team
GBPUSD ended Thursday at 1.3126 losing 16 pips (-0.12%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (GBPUSD as at Jan 23, 2020):
Thursday's trading range has been 54 pips (0.41%), that's far below the last trading month's daily average range of 96 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for GBPUSD.
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.
After trading down to 1.3097 earlier during the day, the FX pair bounced off the key technical support level at 1.3119 (S1). The failure to close below the support might increase that levels importance as support going forward. When prices bounced off a significant support level the last time on Monday, GBPUSD gained 0.30% on the following trading day. After having been unable to move above 1.3153 in the previous session, the Cable ran into sellers again around the same price level today, failing to move higher than 1.3151.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the nearby swing high at 1.3153 where further buy stops might get triggered. With prices trading close to this year's high at 1.3267, upside momentum could accelerate should GBP/USD be able to break out to new highs for the year.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for GBP/USD. Out of 743 times, GBPUSD closed higher 50.07% 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 nine trading days, showing a win rate of 51.68% with an average market move of 0.01%.
With three of the other Major FX Pairs closing higher and three closing lower today, the winners of the day are NZDUSD surging 0.38% and USDCHF gaining 0.11%. On the flipside the worst performers have been EURUSD closing -0.34% lower and USDJPY losing -0.32%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been NZDSGD surging 0.57% and USDPLN closing 0.53% higher. The worst performers of the day have been ZARJPY tanking -0.91% and EURNZD closing -0.72% lower. Read more