CHFZAR pushes through Thursday's high
Swiss Franc/South African Rand (CHFZAR) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, CHFZAR finished the month 2.03% higher at 18.6900 after surging 2532 pips (1.37%) today. Today's close at 18.6900 marks the highest recorded closing price since May 19th. Closing above Thursday's high at 18.5707, the pair confirmed its breakout through the previous session high after trading up to 2145 pips above it intraday.
Daily Candlestick Chart (CHFZAR as at Jul 31, 2020):
Friday's trading range has been 4104 pips (2.22%), that's far above the last trading month's daily average range of 2683 pips. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for CHFZAR.
One bullish candlestick pattern matches today's price action, the White Candle.
After trading down to 18.3748 earlier during the day, the FX pair bounced off the key technical support level at 18.3785 (S1). The failure to close below the support might increase that levels importance as support going forward. When prices bounced off a significant support level the last time on Tuesday, CHFZAR gained 0.69% on the following trading day. Unable to break through the key technical resistance level at 18.7476 (R1), the currency closed below it after spiking up to 18.7852 earlier during the day. The failure to close above the resistance could increase that levels significance going forward.
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 although might signal a potential change in momentum that could lead to a correction back down towards the center of the Bollinger Bands at 17.9499.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Higher Closes" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for CHF/ZAR. Out of 75 times, CHFZAR closed lower 58.67% 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 10 trading days, showing a win rate of 62.67% with an average market move of -0.47%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are NZDUSD losing -1.04% and AUDUSD closing -0.72% lower. On the flipside the best performers have been USDJPY closing 1.12% higher and USDCHF gaining 0.48%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDZAR surging 1.87% and GBPZAR closing 1.79% higher. The worst performers of the day have been NZDCAD tanking -1.15% and NZDHKD closing -1.05% lower. Read more