CHFZAR dominated by bears dragging the market lower throughout the day
Swiss Franc/South African Rand (CHFZAR) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, CHFZAR ended Wednesday at 17.8879 losing 2325 pips (-1.28%). Today's close at 17.8879 marks the lowest recorded closing price since July 27th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 18.0506, the FX pair confirmed its breakout through the prior session low after trading up to 2092 pips below it intraday.
Daily Candlestick Chart (CHFZAR as at Sep 16, 2020):
Wednesday's trading range has been 3076 pips (1.7%), that's slightly below the last trading month's daily average range of 3279 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 slightly lower than usual for CHFZAR.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 17.8252 (S1).
Crossing below the lower Bollinger Band for the first time since August 28th, prices have shown unusually strong downward momentum in the short-term. This might either indicate a potential selling climax after which prices could head back up towards the mean of the Bollinger Bands at 18.4517 or signal the beginning of a strong momentum breakout leading to even lower prices. The last time prices broke out below the lower Bollinger Band on August 28th, CHFZAR actually gained 2.13% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Trading close to July's low at 17.5090 we might see further downside momentum if potential sell stops at the level get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed 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 50 times, CHFZAR closed higher 58.00% 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 78.00% with an average market move of 1.83%.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 0.61% and NZDUSD closing 0.27% higher. On the flipside the worst performers have been USDJPY closing -0.47% lower and EURUSD losing -0.25%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPPLN surging 0.81% and ZARJPY closing 0.78% higher. The worst performers of the day have been EURZAR tanking -1.42% and USDZAR closing -1.17% lower. Read more