USDCZK closes above its opening price after recovering from early selling pressure
US Dollar/Czech Koruna (USDCZK) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, USDCZK finished the week 0.34% higher at 22.9541 after edging higher 103 pips (0.04%) today. Today's close at 22.9541 marks the highest recorded closing price since December 24, 2019. Trading up to 1020 pips lower after the open, the currency managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (USDCZK as at Feb 14, 2020):
Friday's trading range has been 1476 pips (0.64%), that's slightly above the last trading month's daily average range of 1369 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for USDCZK. Prices continued to consolidate within a tight trading range between 22.7530 and 22.9880 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Hanging Man. The last time a Hanging Man showed up on February 6th, USDCZK actually gained 0.55% on the following trading day.
Unable to break through the key technical resistance level at 22.9682 (R1), USD/CZK closed below it after spiking up to 22.9880 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. After having been unable to move lower than 22.8260 in the prior session, the FX pair found buyers again around the same price level today at 22.8404.
While the pair 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 six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for USD/CZK. Out of 574 times, USDCZK closed lower 52.61% 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 eight trading days, showing a win rate of 53.66% with an average market move of -0.01%.
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