PLNEUR runs into sellers around 0.2275 for the third day in a row
Polish Zloty/Euro (PLNEUR) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, PLNEUR ended the month 0.62% higher at 0.2263 after losing 5 pips (-0.22%) today. Trading 10 pips higher after the open, PLN/EUR was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (PLNEUR as at Jul 31, 2020):
Friday's trading range has been 16 pips (0.71%), that's above the last trading month's daily average range of 14 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for PLNEUR.
Two candlestick patterns are matching today's price action, the Tweezer Top which is known as bullish pattern and one bearish pattern, the Bearish Spinning Top.
Prices are trading close to the key technical support level at 0.2254 (S1). Unable to break through the key technical resistance level at 0.2268 (R1), the market closed below it after spiking up to 0.2275 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. The currency ran into sellers again today around 0.2275 for the third trading day in a row after having found sellers at 0.2275 in the prior session and at 0.2275 two days ago. The last time this happened on July 13th, PLNEUR actually gained 0.40% on the following trading day.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Selling could accelerate should prices move below the nearby swing low at 0.2254 where further sell stops might get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous two Highs" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for PLN/EUR. Out of 277 times, PLNEUR closed higher 49.82% 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 four trading days, showing a win rate of 55.96% with an average market move of 0.04%.