EURZAR closes below its opening price unable to hold early session gains
Euro/South African Rand (EURZAR) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, EURZAR finished the week -4.52% lower at 19.2046 after losing 726 pips (-0.38%) today. Today's close at 19.2046 marks the lowest recorded closing price since March 26th. Trading 2203 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 May 14th, EURZAR actually gained 0.89% on the following trading day. Closing below Thursday's low at 19.2335, EUR/ZAR confirmed its breakout through the prior session low after trading up to 663 pips below it intraday.
Daily Candlestick Chart (EURZAR as at May 22, 2020):
Friday's trading range has been 3320 pips (1.72%), that's slightly below the last trading month's daily average range of 3866 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for EURZAR.
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 although might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 20.0027.
While the forex 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 six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Lower Closes" stand out. Its common bearish interpretation has been confirmed for EUR/ZAR. Out of 173 times, EURZAR closed lower 52.02% 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 two trading days, showing a win rate of 52.02% with an average market move of -0.01%.
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