NZDGBP closes lower for the 2nd day in a row
New Zealand Dollar/British Pound (NZDGBP) Technical Analysis Report for Dec 04, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, NZDGBP ended Wednesday at 0.4982 losing 36 pips (-0.72%) on high volume. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 0.5007, NZD/GBP confirmed its breakout through the prior session low after trading up to 29 pips below it intraday.
Daily Candlestick Chart (NZDGBP as at Dec 04, 2019):
Wednesday's trading range has been 46 pips (0.92%), that's slightly above the last trading month's daily average range of 41 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NZDGBP.
Two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Bullish Hikkake Pattern showed up on November 18th, NZDGBP gained 0.73% on the following trading day.
The forex pair closed back below the 50-day moving average at 0.4995.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and might now be heading back down towards the mean of the Bollinger Bands at 0.4972.
While the market is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Selling might accelerate should prices move below the nearby swing low at 0.4948 where further sell stops could get triggered. Further selling might move prices lower should the market test November's close-by low at 0.4918.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Down Close Near Low of Period" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for NZD/GBP. Out of 482 times, NZDGBP closed higher 53.94% 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 10 trading days, showing a win rate of 51.24% with an average market move of 0.19%.