PLNGBP unable to break through key resistance level
Polish Zloty/British Pound (PLNGBP) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
PLNGBP finished the week 1.48% higher at 0.1985 after losing 1 pip (-0.05%) today. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (PLNGBP as at May 22, 2020):
Friday's trading range has been 9 pips (0.45%), that's far below the last trading month's daily average range of 16 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 higher than usual for PLNGBP.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, four candlestick patterns are matching today's price action, the Bearish Harami Cross Pattern, the Hanging Man and the Northern Doji which are known as bearish patterns and one neutral pattern, the Doji. The last time a Northern Doji showed up on March 12th, PLNGBP actually gained 1.57% on the following trading day.
Unable to break through the key technical resistance level at 0.1986 (R1), the market closed below it after spiking up to 0.1987 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. After having been unable to move above 0.1989 in the previous session, the currency ran into sellers again around the same price level today, missing to move higher than 0.1987.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 0.1938.
Though PLN/GBP is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could accelerate should prices move above the nearby swing high at 0.1989 where further buy stops might get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Harami Cross Pattern" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for PLN/GBP. Out of 3 times, PLNGBP closed higher 66.67% 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 seven trading days, showing a win rate of 66.67% with an average market move of 0.53%.