CHFNZD dominated by bulls lifting the market higher throughout the day
Swiss Franc/New Zealand Dollar (CHFNZD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
CHFNZD ended the month 0.99% higher at 1.6515 after gaining 95 pips (0.58%) today on high volume. Today's close at 1.6515 marks the highest recorded closing price since June 1st. The bulls were in full control today, moving the market higher throughout the whole session. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (CHFNZD as at Jul 31, 2020):
Friday's trading range has been 122 pips (0.74%), that's slightly below the last trading month's daily average range of 130 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CHFNZD.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Last Engulfing Top Pattern.
Buyers managed to take out the key technical resistance level at 1.6496 (now S1), which is likely to act as support going forward. After having been unable to move lower than 1.6402 in the previous session, the forex pair found buyers again around the same price level today at 1.6407. The last time this happened on Tuesday, CHFNZD gained 0.44% on the following trading day.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day while could signal a potential change in momentum that might lead to a correction back down towards the center of the Bollinger Bands at 1.6257.
Though the pair is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might speed up should prices move above the nearby swing high at 1.6534 where further buy stops could get triggered.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Although it is usually interpreted as neutral, it has actually shown to be bearish for CHF/NZD. Out of 780 times, CHFNZD closed lower 52.56% 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 five trading days, showing a win rate of 54.49% with an average market move of -0.03%.