NZDGBP closes lower for the 2nd day in a row


New Zealand Dollar/British Pound (NZDGBP) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team

Highlights

NZDGBP breaks back below 20-day moving average
NZDGBP closes lower for the 2nd day in a row
NZDGBP breaks below Wednesday's low

Overview

Moving lower for the 2nd day in a row, NZDGBP ended Thursday at 0.4885 losing 42 pips (-0.85%). Closing below Wednesday's low at 0.4893, the market confirmed its breakout through the previous session low after trading up to 19 pips below it intraday.

Daily Candlestick Chart (NZDGBP as at Mar 26, 2020):

Daily technical analysis candlestick chart for New Zealand Dollar/British Pound (NZDGBP) as at Mar 26, 2020

Thursday's trading range has been 66 pips (1.34%), that's below the last trading month's daily average range of 116 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for NZDGBP.

One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on March 12th, NZDGBP actually gained 4.13% on the following trading day.

Prices are trading close to the key technical support level at 0.4851 (S1). The forex pair closed back below the 20-day moving average at 0.4909 for the first time since March 12th.

While the FX pair 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 speed up should prices move below the nearby swing low at 0.4813 where further sell stops could get activated.

Among the eight 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 481 times, NZDGBP closed higher 53.64% 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 50.94% with an average market move of 0.17%.


Market Conditions for NZDGBP as at Mar 26, 2020

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