GBPZAR finds buyers again around 20.8844
British Pound/South African Rand (GBPZAR) Technical Analysis Report for Sep 18, 2020 | by Techniquant Editorial Team
GBPZAR ended the week -1.57% lower at 21.0921 after gaining 1288 pips (0.61%) today. Trading up to 792 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. The last time this happened on July 29th, GBPZAR gained 2.07% on the following trading day. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (GBPZAR as at Sep 18, 2020):
Friday's trading range has been 2232 pips (1.06%), that's far below the last trading month's daily average range of 3428 pips. Weekly volatility is also lower, being slightly below 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 Bullish Short Candle and the White Candle which are both known as bullish patterns.
The market managed to close back above the 200-day moving average at 21.0862. After having been unable to move lower than 20.8980 in the prior session, the forex pair found buyers again around the same price level today at 20.8844.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could accelerate should prices move above the close-by swing high at 21.2588 where further buy stops might get triggered. 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 nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Short Candle" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for GBP/ZAR. Out of 34 times, GBPZAR closed lower 58.82% 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 64.71% with an average market move of -0.77%.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are GBPUSD losing -0.42% and AUDUSD closing -0.29% lower. On the flipside the best performers have been USDCHF closing 0.34% higher and USDCAD gaining 0.3%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDMXN surging 1.3% and USDZAR closing 1.05% higher. The worst performers of the day have been ZARJPY tanking -1.23% and GBPJPY closing -0.59% lower. Read more