USDCZK pushes through Thursday's high
US Dollar/Czech Koruna (USDCZK) Technical Analysis Report for Jan 24, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, USDCZK ended the week 0.66% higher at 22.8274 after gaining 649 pips (0.29%) today. Today's close at 22.8274 marks the highest recorded closing price since December 26, 2019. Trading up to 511 pips lower after the open, the FX pair managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Thursday's high at 22.7897, the pair confirmed its breakout through the previous session high after trading up to 534 pips above it intraday.
Daily Candlestick Chart (USDCZK as at Jan 24, 2020):
Friday's trading range has been 1302 pips (0.57%), that's slightly below the last trading month's daily average range of 1410 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for USDCZK.
Buyers managed to take out the key technical resistance level at 22.8123 (now S1), which is likely to act as support going forward.
Crossing above the upper Bollinger Band for the first time since September 30, 2019, prices have shown unusually strong upward momentum in the short-term. This might either indicate a potential buying climax after which prices could head back down towards the mean of the Bollinger Bands at 22.6710 or signal the beginning of a strong momentum breakout leading to even higher prices. The last time prices broke out above the upper Bollinger Band on September 30, 2019, USDCZK actually lost -0.37% on the following trading day.
Though USD/CZK is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close above the upper Bollinger Band" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for USD/CZK. Out of 140 times, USDCZK closed lower 55.71% 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 three trading days, showing a win rate of 51.43% with an average market move of -0.11%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are GBPUSD losing -0.41% and AUDUSD closing -0.34% lower. On the flipside the best performers have been USDCHF closing 0.23% higher and USDCAD gaining 0.14%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDNOK surging 0.57% and USDPLN closing 0.53% higher. The worst performers of the day have been GBPJPY tanking -0.6% and AUDJPY closing -0.53% lower. Read more