PLNGBP breaks below key technical support level
Polish Zloty/British Pound (PLNGBP) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
PLNGBP ended the month 0.74% higher at 0.2037 after losing 14 pips (-0.68%) today. The bears were in full control today, moving the market lower throughout the whole session. 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 (PLNGBP as at Jun 30, 2020):
Tuesday's trading range has been 17 pips (0.83%), that's below the last trading month's daily average range of 21 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 lower than usual for PLNGBP.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. After moving higher in the prior session, the market closed lower but above the previous day's open today, forming a bearish Harami Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on June 16th, PLNGBP lost -0.40% on the following trading day.
Prices broke below the key technical support level at 0.2047 (now R1), which is likely to act as resistance going forward.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and might now be heading back down towards the mean of the Bollinger Bands at 0.2023.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could accelerate should prices move below the close-by swing low at 0.2017 where further sell stops might get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Support S1" stand out. Its common bearish interpretation has been confirmed for PLN/GBP. Out of 363 times, PLNGBP closed lower 52.07% 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 52.07% with an average market move of -0.06%.