USDCNH slumps, losing 350 pips (-0.52%) within a single day
US Dollar/Chinese Yuan Renminbi (USDCNH) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, USDCNH finished Wednesday at 6.7453 tanking 350 pips (-0.52%). This is the biggest single-day loss in over two months. Today's close at 6.7453 marks the lowest recorded closing price since May 3, 2019. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 6.7661, the pair confirmed its breakout through the previous session low after trading up to 240 pips below it intraday.
Daily Candlestick Chart (USDCNH as at Sep 16, 2020):
Wednesday's trading range has been 441 pips (0.65%), that's far above the last trading month's daily average range of 254 pips. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for USDCNH.
One bearish candlestick pattern matches today's price action, the Black Candle.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day though might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 6.8502.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "52 Week Low" stand out. Its common bearish interpretation has been confirmed for USD/CNH. Out of 121 times, USDCNH closed lower 52.07% 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 10 trading days, showing a win rate of 62.81% with an average market move of -0.15%.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 0.61% and NZDUSD closing 0.27% higher. On the flipside the worst performers have been USDJPY closing -0.47% lower and EURUSD losing -0.25%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPPLN surging 0.81% and ZARJPY closing 0.78% higher. The worst performers of the day have been EURZAR tanking -1.42% and CHFZAR closing -1.28% lower. Read more