PLNUSD breaks below key technical support level
Polish Zloty/US Dollar (PLNUSD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
PLNUSD ended the month 5.62% higher at 0.2668 after losing 18 pips (-0.67%) today. Trading 19 pips higher after the open, the FX pair was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on July 13th, PLNUSD actually gained 0.87% on the following trading day. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (PLNUSD as at Jul 31, 2020):
Friday's trading range has been 43 pips (1.6%), that's far above the last trading month's daily average range of 29 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for PLNUSD.
Prices are trading close to the key technical support level at 0.2644 (S1). Prices broke below the key technical support level at 0.2683 (now R1), which is likely to act as resistance going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might speed up should prices move below the nearby swing low at 0.2644 where further sell stops could get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for PLN/USD. Out of 391 times, PLNUSD closed higher 49.87% 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 three trading days, showing a win rate of 53.45% with an average market move of 0.06%.