HUFUSD breaks below key technical support level
Hungarian Forint/US Dollar (HUFUSD) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, HUFUSD finished Wednesday at 0.0032894 losing 207 pips (-0.63%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 0.0033090, the FX pair confirmed its breakout through the previous session low after trading up to 256 pips below it intraday.
Daily Candlestick Chart (HUFUSD as at Sep 16, 2020):
Wednesday's trading range has been 328 pips (0.99%), that's slightly below the last trading month's daily average range of 391 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for HUFUSD.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 0.0033052 (now R1), which is likely to act as resistance going forward. The last time this happened on September 3rd, HUFUSD lost -0.49% on the following trading day.
Though HUF/USD is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could speed up should prices move below the close-by swing low at 0.0032597 where further sell stops might get activated. As prices are trading close to September's low at 0.0032587, downside momentum could accelerate should the currency mark new lows for the month.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) below 20" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for HUF/USD. Out of 274 times, HUFUSD closed lower 59.12% 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 51.82% with an average market move of -0.15%.