NOKUSD closes higher for the 2nd day in a row
Norwegian Krone/US Dollar (NOKUSD) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, NOKUSD ended the month 2.04% higher at 0.1049 after gaining 15 pips (1.45%) today on low volume. Trading up to 9 pips lower after the open, the FX pair managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Monday's high at 0.1037, the market confirmed its breakout through the previous session high after trading up to 13 pips above it intraday.
Daily Candlestick Chart (NOKUSD as at Jun 30, 2020):
Tuesday's trading range has been 26 pips (2.52%), that's above the last trading month's daily average range of 20 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for NOKUSD.
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, one bullish candlestick pattern matches today's price action, the White Candle. The last time a White Candle showed up on June 3rd, NOKUSD gained 1.14% on the following trading day.
After trading down to 0.1024 earlier during the day, NOK/USD bounced off the key technical support level at 0.1028 (S1). The failure to close below the support might increase that levels significance as support going forward. Prices are trading close to the key technical resistance level at 0.1058 (R1). The currency was bought again around 0.1024 after having seen lows at 0.1027, 0.1024 and 0.1027 in the last three trading sessions. Obviously there is something going on at that level.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could accelerate should prices move above the nearby swing high at 0.1057 where further buy stops might get activated.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Outside Bar" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for NOK/USD. Out of 115 times, NOKUSD closed lower 55.65% 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 53.91% with an average market move of -0.54%.