USDGBP slumps, losing 223 pips (-2.65%) within a single day
US Dollar/British Pound (USDGBP) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, USDGBP finished Thursday at 0.8195 tanking 223 pips (-2.65%). This is the biggest single-day loss in over three years. The last time we've seen such an unusually strong single-day loss on January 31st, USDGBP actually gained 1.60% on the following trading day. The bears were in full control today, moving the market lower throughout the whole session. Closing below Wednesday's low at 0.8351, the market confirmed its breakout through the previous session low after trading up to 174 pips below it intraday.
Daily Candlestick Chart (USDGBP as at Mar 26, 2020):
Thursday's trading range has been 314 pips (3.73%), that's far above the last trading month's daily average range of 183 pips. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for USDGBP.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 0.8379 (now R1), which is likely to act as resistance going forward.
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 "Decisive Down Move" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for USD/GBP. Out of 302 times, USDGBP closed higher 52.65% 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 53.64% with an average market move of 0.36%.