USDCZK closes within prior day's range after lackluster session
US Dollar/Czech Koruna (USDCZK) Technical Analysis Report for Sep 18, 2020 | by Techniquant Editorial Team
USDCZK ended the week 0.68% higher at 22.5804 after gaining 313 pips (0.14%) today. Trading up to 665 pips lower after the open, the forex pair managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (USDCZK as at Sep 18, 2020):
Friday's trading range has been 1358 pips (0.6%), that's far below the last trading month's daily average range of 2117 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for USDCZK.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top. The last time a Bullish Spinning Top showed up on Monday, USDCZK gained 0.56% on the following trading day.
USD/CZK found buyers again today around 22.4809 for the third trading day in a row after having found demand at 22.5139 in the previous session and at 22.5007 two days ago.
Though 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.
Buying could speed up should prices move above the close-by swing high at 22.7938 where further buy stops might get activated. Selling could accelerate should prices move below the nearby swing low at 22.3837 where further sell stops might get triggered.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior two Lows" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for USD/CZK. Out of 166 times, USDCZK closed lower 54.22% 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 54.82% with an average market move of -0.04%.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are GBPUSD losing -0.42% and AUDUSD closing -0.29% lower. On the flipside the best performers have been USDCHF closing 0.34% higher and USDCAD gaining 0.3%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDMXN surging 1.3% and USDZAR closing 1.05% higher. The worst performers of the day have been ZARJPY tanking -1.23% and GBPJPY closing -0.59% lower. Read more