PLNUSD closes below its opening price unable to hold early session gains
Polish Zloty/US Dollar (PLNUSD) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, PLNUSD ended the week -0.47% lower at 0.2549 after losing 5 pips (-0.2%) today. Today's close at 0.2549 marks the lowest recorded closing price since October 9, 2019. Trading 10 pips higher after the open, the currency was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on Monday, PLNUSD actually gained 0.27% on the following trading day. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (PLNUSD as at Feb 14, 2020):
Friday's trading range has been 21 pips (0.82%), that's slightly above the last trading month's daily average range of 19 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for PLNUSD.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Unable to break through the key technical resistance level at 0.2554 (R1), the FX pair closed below it after spiking up to 0.2564 earlier during the day. The failure to close above the resistance might increase that levels significance going forward.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Outside Bar" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for PLN/USD. Out of 119 times, PLNUSD closed higher 58.82% 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 52.94% with an average market move of 0.04%.