USDPLN finds support at 20-day moving average
US Dollar/Polish Zloty (USDPLN) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, USDPLN ended the month -1.19% lower at 3.9582 after losing 56 pips (-0.14%) today. Trading 262 pips higher after the open, the forex pair was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on June 10th, USDPLN actually gained 1.15% on the following trading day. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (USDPLN as at Jun 30, 2020):
Tuesday's trading range has been 468 pips (1.18%), that's slightly below the last trading month's daily average range of 515 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for USDPLN.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Additionally, two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Bearish High-Wave Candle which are both known as bearish patterns.
After trading as low as 3.9425 during the day, the FX pair found support at the 20-day moving average at 3.9460. The pair closed back below the 200-day moving average at 3.9632 for the first time since June 24th. The currency was sold again around 3.9893 after having seen highs at 3.9887, 3.9908 and 3.9929 in the last three trading sessions. Obviously there is something going on at that level.
USD/PLN shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Buying could accelerate should prices move above the close-by swing high at 3.9929 where further buy stops might get activated. Selling could speed up should prices move below the nearby swing low at 3.9135 where further sell stops might get triggered. As prices are trading close to June's high at 4.0080, upside momentum could accelerate should the market mark new highs for the month. As prices are trading close to June's low at 3.8850, downside momentum might speed up should USDPLN mark new lows for the month.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish High-Wave Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for USD/PLN. Out of 64 times, USDPLN closed higher 56.25% 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 59.38% with an average market move of 0.27%.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 0.82% and NZDUSD closing 0.53% higher. On the flipside the worst performers have been USDCAD closing -0.62% lower and USDCHF losing -0.41%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPZAR surging 1.31% and GBPJPY closing 1.16% higher. The worst performers of the day have been USDNOK tanking -1.51% and EURGBP closing -0.9% lower. Read more