NZDGBP slides to lowest close since October 17, 2018
New Zealand Dollar/British Pound (NZDGBP) Technical Analysis Report for Oct 11, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, NZDGBP finished the week -2.34% lower at 0.5006 after tanking 73 pips (-1.44%) today on high volume. Today's close at 0.5006 marks the lowest recorded closing price since October 17, 2018. Closing below Thursday's low at 0.5069, the market confirmed its breakout through the prior session low after trading up to 78 pips below it intraday.
Daily Candlestick Chart (NZDGBP as at Oct 11, 2019):
Friday's trading range has been 117 pips (2.3%), that's far above the last trading month's daily average range of 50 pips. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for NZDGBP.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 0.4991 earlier during the day, the currency bounced off the key technical support level at 0.4999 (S1). The failure to close below the support might increase that levels significance as support going forward. Unable to break through the key technical resistance level at 0.5097 (R1), the FX pair closed below it after spiking up to 0.5108 earlier during the day. The failure to close above the resistance could increase that levels importance going forward. When prices bounced off a significant resistance level the last time on Wednesday, NZDGBP lost -1.46% on the following trading day.
Crossing below the lower Bollinger Band for the first time since September 20th, prices have shown unusually strong downward momentum in the short-term. This might either indicate a potential selling climax after which prices could head back up towards the mean of the Bollinger Bands at 0.5087 or signal the beginning of a strong momentum breakout leading to even lower prices.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Strong Down Move" stand out. Its common bearish interpretation has been confirmed for NZD/GBP. Out of 210 times, NZDGBP closed lower 58.57% 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 eight trading days, showing a win rate of 50.48% with an average market move of 0.04%.