NZDGBP closes lower for the 2nd day in a row
New Zealand Dollar/British Pound (NZDGBP) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, NZDGBP ended the week -0.74% lower at 0.4932 after edging lower 4 pips (-0.08%) today. Trading 14 pips higher after the open, NZD/GBP was unable to hold its gains as the bears took control ending the day below its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (NZDGBP as at Feb 14, 2020):
Friday's trading range has been 24 pips (0.49%), that's far below the last trading month's daily average range of 42 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 NZDGBP.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Unable to break through the key technical resistance level at 0.4943 (R1), the market closed below it after spiking up to 0.4950 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. After having been unable to move lower than 0.4932 in the prior session, the pair found buyers again around the same price level today at 0.4926. The last time this happened on Wednesday, NZDGBP actually lost -1.06% on the following trading day.
While the FX pair is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
With prices trading close to this year's low at 0.4893, downside momentum could speed up should the forex pair break out to new lows for the year. As prices are trading close to February's low at 0.4897, downside momentum might accelerate should the currency mark new lows for the month.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for NZD/GBP. Out of 460 times, NZDGBP closed higher 55.43% 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 51.09% with an average market move of 0.18%.