EURNZD closes below its opening price unable to hold early session gains
Euro/New Zealand Dollar (EURNZD) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
EURNZD ended the week -1.53% lower at 1.6835 after losing 3 pips (-0.02%) today on low volume. Trading 35 pips higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on Monday, EURNZD lost -0.25% on the following trading day. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (EURNZD as at Feb 14, 2020):
Friday's trading range has been 54 pips (0.32%), that's far below the last trading month's daily average range of 108 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for EURNZD.
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, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After trading down to 1.6820 earlier during the day, the forex pair bounced off the key technical support level at 1.6824 (S1). The failure to close below the support could increase that levels significance as support going forward.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling might speed up should prices move below the nearby swing low at 1.6786 where further sell stops could get activated. With prices trading close to this year's low at 1.6645, downside momentum might accelerate should the FX pair break out to new lows for the year.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Though it is usually interpreted as neutral, it has actually shown to be bearish for EUR/NZD. Out of 802 times, EURNZD closed lower 54.11% 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 53.74% with an average market move of -0.08%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are USDCAD losing -0.12% and EURUSD closing -0.08% lower. On the flipside the best performers have been USDCHF closing 0.28% higher and GBPUSD gaining 0.02%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDSEK surging 0.51% and EURSEK closing 0.43% higher. The worst performers of the day have been EURHUF tanking -0.65% and USDHUF closing -0.58% lower. Read more