GBPNZD finds buyers at key support level
British Pound/New Zealand Dollar (GBPNZD) Technical Analysis Report for Mar 31, 2020 | by Techniquant Editorial Team
Moving higher for the 6th day in a row, GBPNZD ended the month 1.51% higher at 2.0839 after gaining 28 pips (0.13%) today. Today's close at 2.0839 marks the highest recorded closing price since June 7, 2016. Trading up to 363 pips lower after the open, the FX pair managed to reverse during the session as bulls took control ending the day above its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (GBPNZD as at Mar 31, 2020):
Tuesday's trading range has been 517 pips (2.48%), that's slightly above the last trading month's daily average range of 506 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for GBPNZD.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. The last time this happened on March 12th, GBPNZD actually lost -3.97% on the following trading day. Additionally, two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Hanging Man.
After trading down to 2.0448 earlier during the day, the currency bounced off the key technical support level at 2.0615 (S1). The failure to close below the support might increase that levels significance as support going forward. Prices are trading close to the key technical resistance level at 2.1010 (R1). After having been unable to move lower than 2.0510 in the prior session, the market found buyers again around the same price level today at 2.0448.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "6 Consecutive Higher Closes" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for GBP/NZD. Out of 19 times, GBPNZD closed lower 78.95% 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 52.63% with an average market move of -0.20%.
With six out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are NZDUSD losing -0.9% and USDCAD closing -0.73% lower. On the flipside the best performer has been USDCHF closing 0.27% higher. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been CADCHF surging 1.0% and EURNZD closing 0.74% higher. The worst performers of the day have been NZDCAD tanking -1.61% and EURNOK closing -1.46% lower. Read more