EURZAR climbs to highest close since May 15th
Euro/South African Rand (EURZAR) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, EURZAR ended the month 3.15% higher at 20.1078 after surging 2534 pips (1.28%) today on high volume. Today's close at 20.1078 marks the highest recorded closing price since May 15th. Closing above Thursday's high at 19.9609, the FX pair confirmed its breakout through the previous session high after trading up to 2562 pips above it intraday.
Daily Candlestick Chart (EURZAR as at Jul 31, 2020):
Friday's trading range has been 4125 pips (2.08%), that's far above the last trading month's daily average range of 2510 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 EURZAR.
One bullish candlestick pattern matches today's price action, the White Candle.
After trading down to 19.8046 earlier during the day, the forex pair bounced off the key technical support level at 19.8537 (S1). The failure to close below the support could increase that levels significance as support going forward. When prices bounced off a significant support level the last time on July 21st, EURZAR gained 0.80% on the following trading day. Prices are trading close to the key technical resistance level at 20.3036 (R1).
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 while might signal a potential change in momentum that could lead to a correction back down towards the center of the Bollinger Bands at 19.2420.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Higher Closes" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for EUR/ZAR. Out of 79 times, EURZAR closed lower 53.16% of the time on the next trading day after the market condition occurred.
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