PLNUSD finds support at 50-day moving average
Polish Zloty/US Dollar (PLNUSD) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, PLNUSD finished Wednesday at 0.2655 losing 3 pips (-0.11%). Trading 12 pips higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Tuesday's low at 0.2657, the pair confirmed its breakout through the previous session low after trading up to 8 pips below it intraday.
Daily Candlestick Chart (PLNUSD as at Sep 16, 2020):
Wednesday's trading range has been 23 pips (0.86%), that's below the last trading month's daily average range of 30 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 PLNUSD.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on August 6th, PLNUSD lost -0.60% on the following trading day.
After trading as low as 0.2649 during the day, PLN/USD found support at the 50-day moving average at 0.2653.
Though the FX 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 0.2682 where further buy stops could get triggered. Selling might speed up should prices move below the nearby swing low at 0.2637 where further sell stops could get activated. As prices are trading close to September's low at 0.2636, downside momentum might accelerate should the currency mark new lows for the month.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed below last periods low" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for PLN/USD. Out of 552 times, PLNUSD closed higher 51.45% of the time on the next trading day after the market condition occurred.