USDCNH closes higher for the 3rd day in a row
US Dollar/Chinese Yuan Renminbi (USDCNH) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, USDCNH ended the week -0.19% lower at 6.9934 after gaining 41 pips (0.06%) today on low volume. Trading up to 81 pips lower after the open, the pair managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Thursday's high at 6.9924, the market confirmed its breakout through the prior session high after trading up to 43 pips above it intraday.
Daily Candlestick Chart (USDCNH as at Feb 14, 2020):
Friday's trading range has been 157 pips (0.22%), that's far below the last trading month's daily average range of 300 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for USDCNH.
Buyers managed to take out the key technical resistance level at 6.9899 (now S1), which is likely to act as support going forward. The last time this happened on February 7th, USDCNH actually lost -0.32% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could speed up should prices move above the close-by swing high at 7.0128 where further buy stops might get triggered. With prices trading close to this year's high at 7.0232, upside momentum could accelerate should the FX pair be able to break out to new highs for the year.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Higher Closes" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for USD/CNH. Out of 146 times, USDCNH closed lower 53.42% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after six trading days, showing a win rate of 56.85% with an average market move of -0.04%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are USDCAD losing -0.12% and EURUSD closing -0.08% lower. On the flipside the best performers have been USDCHF closing 0.28% higher and GBPUSD gaining 0.02%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDSEK surging 0.51% and EURSEK closing 0.43% higher. The worst performers of the day have been EURHUF tanking -0.65% and USDHUF closing -0.58% lower. Read more