EURZAR breaks below Tuesday's low
Euro/South African Rand (EURZAR) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, EURZAR finished Wednesday at 19.2185 losing 2769 pips (-1.42%). Today's close at 19.2185 marks the lowest recorded closing price since July 22nd. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 19.4234, the market confirmed its breakout through the previous session low after trading up to 2587 pips below it intraday.
Daily Candlestick Chart (EURZAR as at Sep 16, 2020):
Wednesday's trading range has been 3563 pips (1.83%), that's slightly above the last trading month's daily average range of 3368 pips. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for EURZAR.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 19.1647 earlier during the day, EUR/ZAR bounced off the key technical support level at 19.1759 (S1). The failure to close below the support might increase that levels significance as support going forward.
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 could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 19.8799 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, EURZAR actually gained 2.36% on the following trading day.
The forex pair shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Trading close to July's low at 18.8334 we could see further downside momentum if potential sell stops at the level get activated.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for EUR/ZAR. Out of 517 times, EURZAR closed higher 53.19% 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 53.38% with an average market move of 0.45%.
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 CHFZAR tanking -1.28% and USDZAR closing -1.17% lower. Read more