SEKUSD slumps -0.87% on high volume
Swedish Krona/US Dollar (SEKUSD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
SEKUSD ended the month 6.25% higher at 0.1139 after tanking 10 pips (-0.87%) today on high volume. This is the biggest single-day loss in over a month. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (SEKUSD as at Jul 31, 2020):
Friday's trading range has been 20 pips (1.74%), that's far above the last trading month's daily average range of 12 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for SEKUSD.
Even with a strong opening the FX pair closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on Tuesday, SEKUSD actually gained 0.70% on the following trading day.
The market was bought again around 0.1137 after having seen lows at 0.1137, 0.1138 and 0.1137 in the last three trading sessions. Obviously there is something going on at that level.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Engulfing Candle" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for SEK/USD. Out of 165 times, SEKUSD closed higher 53.33% 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 53.33% with an average market move of 0.12%.