SEKUSD closes lower for the 2nd day in a row
Swedish Krona/US Dollar (SEKUSD) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, SEKUSD finished the week -0.68% lower at 0.1028 after tanking 6 pips (-0.58%) today. This is the biggest single-day loss in over two weeks. Today's close at 0.1028 marks the lowest recorded closing price since October 16, 2019. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 0.1032, the currency confirmed its breakout through the prior session low after trading up to 4 pips below it intraday.
Daily Candlestick Chart (SEKUSD as at Feb 14, 2020):
Friday's trading range has been 6 pips (0.58%), that's slightly below the last trading month's daily average range of 6 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SEKUSD.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 0.1024 (S1). Unable to break through the key technical resistance level at 0.1034 (R1), the market closed below it after spiking up to 0.1034 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. When prices bounced off a significant resistance level the last time on January 16th, SEKUSD lost -0.28% on the following trading day.
Crossing below the lower Bollinger Band for the first time since January 27th, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 0.1041 or signal the beginning of a strong momentum breakout leading to even lower prices.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for SEK/USD. Out of 150 times, SEKUSD closed higher 50.00% 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 two trading days, showing a win rate of 55.33% with an average market move of 0.07%.