USDCZK pushes through key technical resistance level
US Dollar/Czech Koruna (USDCZK) Technical Analysis Report for Jan 11, 2019 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, USDCZK ended the week -0.66% lower at 22.2870 after gaining 525 pips (0.24%) today. Trading up to 782 pips lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Thursday's high at 22.2702, the pair confirmed its breakout through the previous session high after trading up to 613 pips above it intraday.
Daily Candlestick Chart (USDCZK as at Jan 11, 2019):
Friday's trading range has been 1737 pips (0.78%), that's slightly below the last trading month's daily average range of 2028 pips. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for USDCZK. Prices continued to consolidate within a tight trading range between 22.1546 and 22.4478 where it has been caught now for the whole last trading week.
Buyers managed to take out the key technical resistance level at 22.2861 (now S1), which is likely to act as support going forward. The last time this happened on January 2nd, USDCZK actually lost -0.85% on the following trading day. USD/CZK found buyers again today around 22.1578 for the third trading day in a row after having found demand at 22.1546 in the prior session and at 22.1738 two days ago.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Selling might accelerate should prices move below the nearby swing low at 22.1546 where further sell stops could get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous two Lows" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for USD/CZK. Out of 170 times, USDCZK closed lower 54.12% 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 55.29% with an average market move of -0.16%.
With five out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 0.71% and NZDUSD closing 0.69% higher. On the flipside the worst performers have been EURUSD closing -0.27% lower and USDCHF losing -0.09%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been NZDCAD surging 0.98% and GBPCAD closing 0.97% higher. The worst performers of the day have been EURNZD tanking -1.04% and EURGBP closing -0.99% lower. Read more