CHFZAR closes above its opening price after recovering from early selling pressure
Swiss Franc/South African Rand (CHFZAR) Technical Analysis Report for Feb 17, 2020 | by Techniquant Editorial Team
CHFZAR ended Monday at 15.2841 gaining 969 pips (0.64%) on low volume. Trading up to 715 pips lower after the open, the market 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 missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (CHFZAR as at Feb 17, 2020):
Monday's trading range has been 1941 pips (1.28%), that's slightly below the last trading month's daily average range of 2199 pips. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CHFZAR. Prices continued to consolidate within a tight trading range between 15.0959 and 15.3541 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. Despite a weak opening the FX pair managed to close above the previous day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
After trading down to 15.1141 earlier during the day, the pair bounced off the key technical support level at 15.1827 (S1). The failure to close below the support might increase that levels importance as support going forward. Prices are trading close to the key technical resistance level at 15.3981 (R1). The currency found buyers again today around 15.1141 for the third trading day in a row after having found demand at 15.1201 in the prior session and at 15.1423 two days ago. The last time this happened on January 24th, CHFZAR gained 1.65% on the following trading day.
Although the forex pair is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might speed up should prices move above the close-by swing high at 15.3180 where further buy stops could get triggered. Selling might accelerate should prices move below the nearby swing low at 15.0959 where further sell stops could get activated. With prices trading close to this year's high at 15.6153, upside momentum might speed up should CHF/ZAR be able to break out to new highs for the year. As prices are trading close to February's low at 15.0794, downside momentum could accelerate should CHFZAR 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 "Bullish Engulfing Candle" stand out. Its common bullish interpretation has been confirmed for CHF/ZAR. Out of 93 times, CHFZAR closed higher 54.84% 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 55.91% with an average market move of 0.72%.
With three Major FX Pairs closing higher and three closing lower today, the winners of the day are USDJPY surging 0.09% and EURUSD gaining 0.04%. On the flipside the worst performers have been GBPUSD closing -0.31% lower and USDCHF losing -0.14%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been EURZAR surging 0.53% and USDZAR closing 0.49% higher. The worst performers of the day have been GBPSGD tanking -0.53% and GBPCHF closing -0.47% lower. Read more