GBPZAR breaks below Tuesday's low
British Pound/South African Rand (GBPZAR) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, GBPZAR ended Wednesday at 21.0903 losing 1195 pips (-0.56%). Today's close at 21.0903 marks the lowest recorded closing price since July 22nd. Closing below Tuesday's low at 21.0928, the pair confirmed its breakout through the previous session low after trading up to 608 pips below it intraday.
Daily Candlestick Chart (GBPZAR as at Sep 16, 2020):
Wednesday's trading range has been 2127 pips (1.0%), that's far below the last trading month's daily average range of 3589 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 slightly higher than usual for GBPZAR.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns.
After trading as low as 21.0320 during the day, the forex pair found support at the 200-day moving average at 21.0701. The last time this happened on January 9th, GBPZAR gained 1.03% on the following trading day.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and might now be heading back up towards the mean of the Bollinger Bands at 22.0299.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Trading close to July's low at 20.7700 we could see further downside momentum if potential sell stops at the level get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 200" stand out. Its common bullish interpretation has been confirmed for GBP/ZAR. Out of 52 times, GBPZAR closed higher 53.85% 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 73.08% with an average market move of 1.61%.
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 EURZAR tanking -1.42% and CHFZAR closing -1.28% lower. Read more