NZDGBP breaks below key technical support level
New Zealand Dollar/British Pound (NZDGBP) Technical Analysis Report for Mar 27, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, NZDGBP ended the week -1.26% lower at 0.4842 after losing 43 pips (-0.88%) today. Closing below Thursday's low at 0.4874, the pair confirmed its breakout through the prior session low after trading up to 52 pips below it intraday.
Daily Candlestick Chart (NZDGBP as at Mar 27, 2020):
Friday's trading range has been 92 pips (1.88%), that's slightly below the last trading month's daily average range of 117 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for NZDGBP.
Prices broke below the key technical support level at 0.4851 (now R1), which is likely to act as resistance going forward. The last time this happened on Wednesday, NZDGBP lost -0.85% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling might speed up should prices move below the nearby swing low at 0.4813 where further sell stops could get triggered.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for NZD/GBP. Out of 156 times, NZDGBP closed higher 53.21% 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 49.36% with an average market move of 0.08%.