NZDGBP runs into sellers around 0.5227 for the third day in a row
New Zealand Dollar/British Pound (NZDGBP) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, NZDGBP finished Wednesday at 0.5192 losing 16 pips (-0.31%). Closing below Tuesday's low at 0.5206, the forex pair confirmed its breakout through the prior session low after trading up to 25 pips below it intraday.
Daily Candlestick Chart (NZDGBP as at Sep 16, 2020):
Wednesday's trading range has been 46 pips (0.88%), that's slightly above the last trading month's daily average range of 43 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for NZDGBP.
After trading down to 0.5181 earlier during the day, the FX pair bounced off the key technical support level at 0.5184 (S1). The failure to close below the support could increase that levels importance as support going forward. When prices bounced off a significant support level the last time on August 6th, NZDGBP actually lost -0.65% on the following trading day. Unable to break through the key technical resistance level at 0.5225 (R1), NZD/GBP closed below it after spiking up to 0.5227 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. The pair ran into sellers again today around 0.5227 for the third trading day in a row after having found sellers at 0.5232 in the previous session and at 0.5227 two days ago.
The market shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Buying could speed up should prices move above the nearby swing high at 0.5232 where further buy stops might get triggered. With prices trading close to this year's high at 0.5262, upside momentum could accelerate should the currency be able to break out to new highs for the year.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for NZD/GBP. Out of 526 times, NZDGBP closed higher 51.90% 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 54.37% with an average market move of 0.23%.