NZDAUD breaks below key technical support level
New Zealand Dollar/Australian Dollar (NZDAUD) Technical Analysis Report for Jun 01, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, NZDAUD ended Monday at 0.9258 losing 47 pips (-0.51%) on high volume. The bears were in full control today, moving the market lower throughout the whole session. Closing below Friday's low at 0.9299, NZD/AUD confirmed its breakout through the prior session low after trading up to 54 pips below it intraday.
Daily Candlestick Chart (NZDAUD as at Jun 01, 2020):
Monday's trading range has been 67 pips (0.72%), that's slightly above the last trading month's daily average range of 56 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for NZDAUD.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on May 29th, NZDAUD lost -0.51% on the following trading day.
Prices broke below the key technical support level at 0.9301 (now R1), which is likely to act as resistance going forward.
While the FX pair is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Selling could accelerate should prices move below the nearby swing low at 0.9233 where further sell stops might get activated. With prices trading close to this year's low at 0.9233, downside momentum could speed up should the currency break out to new lows for the year.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for NZD/AUD. Out of 765 times, NZDAUD closed higher 51.50% 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 54.90% with an average market move of 0.11%.