PLNEUR runs into sellers again around 0.2217
Polish Zloty/Euro (PLNEUR) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
PLNEUR ended the week 1.28% higher at 0.2216 after flat today. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (PLNEUR as at May 22, 2020):
Friday's trading range has been 8 pips (0.36%), that's far below the last trading month's daily average range of 12 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for PLNEUR.
Four candlestick patterns are matching today's price action, the Tweezer Top which is known as bullish pattern, two bearish patterns, the Hanging Man and the Northern Doji and one neutral pattern, the Doji. The last time a Northern Doji showed up on April 8th, PLNEUR lost -0.41% on the following trading day.
Prices are trading close to the key technical resistance level at 0.2218 (R1). After having been unable to move above 0.2217 in the previous session, the FX pair ran into sellers again around the same price level today, missing to move higher than 0.2217.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day although might signal a potential change in momentum that could lead to a correction back down towards the center of the Bollinger Bands at 0.2198.
Though PLN/EUR is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Further buying could move prices higher should the market test April's nearby high at 0.2218.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near high of period" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for PLN/EUR. Out of 486 times, PLNEUR closed lower 52.67% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 51.03% with an average market move of -0.12%.