USDCZK closes lower for the 3rd day in a row
US Dollar/Czech Koruna (USDCZK) Technical Analysis Report for Oct 11, 2019 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, USDCZK ended the week -0.22% lower at 23.3754 after losing 911 pips (-0.39%) today on high volume. Today's close at 23.3754 marks the lowest recorded closing price since September 13th. Closing below Thursday's low at 23.4273, the FX pair confirmed its breakout through the previous session low after trading up to 1117 pips below it intraday.
Daily Candlestick Chart (USDCZK as at Oct 11, 2019):
Friday's trading range has been 1917 pips (0.82%), that's far above the last trading month's daily average range of 1386 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for USDCZK.
After trading down to 23.3156 earlier during the day, the currency bounced off the key technical support level at 23.3337 (S1). The failure to close below the support could increase that levels importance as support going forward. When prices bounced off a significant support level the last time on September 16th, USDCZK actually lost -0.46% on the following trading day. USD/CZK closed below the 50-day moving average at 23.3778 for the first time since July 22nd.
Although the forex pair is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Further selling could move prices lower should the market test September's nearby low at 23.2659.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Lower Closes" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for USD/CZK. Out of 159 times, USDCZK closed higher 55.97% 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 10 trading days, showing a win rate of 53.46% with an average market move of 0.08%.
With six out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 1.67% and AUDUSD closing 0.47% higher. On the flipside the worst performer has been USDCAD closing -0.67% lower. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been ZARJPY surging 2.23% and GBPJPY closing 2.1% higher. The worst performers of the day have been CHFZAR tanking -1.88% and USDZAR closing -1.87% lower. Read more