GBPZAR still stuck within tight trading range
British Pound/South African Rand (GBPZAR) Technical Analysis Report for Oct 11, 2019 | by Techniquant Editorial Team
GBPZAR finished the week 0.63% higher at 18.6864 after losing 440 pips (-0.23%) today on high volume. Trading 1210 pips higher after the open, the pair was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (GBPZAR as at Oct 11, 2019):
Friday's trading range has been 3195 pips (1.71%), that's far above the last trading month's daily average range of 2400 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 slightly lower than usual for GBPZAR. Prices continued to consolidate within a tight trading range between 18.4471 and 18.8536 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Bearish High-Wave Candle which are both known as bearish patterns. The last time a Bearish High-Wave Candle showed up on March 12th, GBPZAR actually gained 2.51% on the following trading day.
Prices broke below the key technical support level at 18.7136 (now R1), which is likely to act as resistance going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the close-by swing high at 18.9109 where further buy stops might get triggered. Selling could accelerate should prices move below the nearby swing low at 18.4471 where further sell stops might get activated. Trading close to August's high at 18.9642 we could see further upside momentum if potential buy stops at the level get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for GBP/ZAR. Out of 510 times, GBPZAR closed higher 54.90% 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 52.55% with an average market move of 0.26%.
With six out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 1.67% and AUDUSD closing 0.47% higher. On the flipside the worst performer has been USDCAD closing -0.67% lower. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been ZARJPY surging 2.23% and GBPJPY closing 2.1% higher. The worst performers of the day have been CHFZAR tanking -1.88% and USDZAR closing -1.87% lower. Read more