CHFZAR closes within previous day's range after lackluster session
Swiss Franc/South African Rand (CHFZAR) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 5th day in a row, CHFZAR ended the week -5.22% lower at 18.1367 after edging lower 47 pips (-0.03%) today. Today's close at 18.1367 marks the lowest recorded closing price since March 26th. Trading 2594 pips higher after the open, the FX pair was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (CHFZAR as at May 22, 2020):
Friday's trading range has been 3187 pips (1.76%), that's below the last trading month's daily average range of 3819 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for CHFZAR.
Three candlestick patterns are matching today's price action, the Southern Doji which is known as bullish pattern, one bearish pattern, the Gravestone Doji and one neutral pattern, the Doji. The last time a Doji showed up on Tuesday, CHFZAR lost -1.60% on the following trading day.
After having been unable to move lower than 18.0924 in the prior session, the currency found buyers again around the same price level today at 18.0833.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day while might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 18.9524.
Although the pair is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for CHF/ZAR. Out of 90 times, CHFZAR closed higher 53.33% 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 71.11% with an average market move of 1.67%.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are GBPUSD losing -0.47% and EURUSD closing -0.44% lower. On the flipside the best performers have been USDCAD closing 0.33% higher and USDCHF gaining 0.08%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDCZK surging 1.09% and USDHUF closing 0.9% higher. The worst performers of the day have been USDMXN tanking -0.58% and SGDHKD closing -0.51% lower. Read more