USDCZK breaks below key technical support level
US Dollar/Czech Koruna (USDCZK) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, USDCZK ended Thursday at 24.6357 tanking 5696 pips (-2.26%) on low volume. This is the biggest single-day loss in over four years. The bears were in full control today, moving the market lower throughout the whole session. Closing below Wednesday's low at 25.1323, the currency confirmed its breakout through the prior session low after trading up to 5577 pips below it intraday.
Daily Candlestick Chart (USDCZK as at Mar 26, 2020):
Thursday's trading range has been 6868 pips (2.72%), that's slightly above the last trading month's daily average range of 5951 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for USDCZK.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 25.0811 (now R1), which is likely to act as resistance going forward. The last time this happened on March 5th, USDCZK lost -0.39% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for USD/CZK. Out of 165 times, USDCZK closed higher 55.15% 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 52.73% with an average market move of 0.11%.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 2.72% and NZDUSD closing 1.88% higher. On the flipside the worst performers have been USDCHF closing -1.43% lower and USDJPY losing -1.42%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPHKD surging 2.72% and GBPZAR closing 2.65% higher. The worst performers of the day have been USDMXN tanking -4.12% and USDNOK closing -3.12% lower. Read more