PLNEUR still stuck within tight trading range
Polish Zloty/Euro (PLNEUR) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
PLNEUR ended Wednesday at 0.2248 edging higher 1 pip (0.04%). Trading up to 4 pips lower after the open, the FX pair managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (PLNEUR as at Sep 16, 2020):
Wednesday's trading range has been 8 pips (0.36%), that's far below the last trading month's daily average range of 15 pips. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for PLNEUR. Prices continued to consolidate within a tight trading range between 0.2241 and 0.2255 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Bullish Spinning Top and the Tweezer Bottom which are both known as bullish patterns. The last time a Tweezer Bottom showed up on September 10th, PLNEUR gained 0.13% on the following trading day.
Prices are trading close to the key technical resistance level at 0.2254 (R1). The currency found buyers again today around 0.2243 for the third trading day in a row after having found demand at 0.2243 in the prior session and at 0.2245 two days ago.
Though the pair is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might accelerate should prices move above the close-by swing high at 0.2255 where further buy stops could get triggered. Trading close to July's low at 0.2224 we might see further downside momentum if potential sell stops at the level get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bullish Intraday Reversal" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for PLN/EUR. Out of 534 times, PLNEUR closed lower 48.88% 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 50.37% with an average market move of -0.06%.