NZDAUD finds buyers at key support level
New Zealand Dollar/Australian Dollar (NZDAUD) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, NZDAUD finished Wednesday at 0.9215 gaining 21 pips (0.23%). Closing above Tuesday's high at 0.9208, the currency confirmed its breakout through the prior session high after trading up to 23 pips above it intraday.
Daily Candlestick Chart (NZDAUD as at Sep 16, 2020):
Wednesday's trading range has been 42 pips (0.46%), that's slightly below the last trading month's daily average range of 48 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for NZDAUD.
One bearish candlestick pattern matches today's price action, the Bearish Hikkake Pattern. The last time a Bearish Hikkake Pattern showed up on August 26th, NZDAUD lost -0.08% on the following trading day.
After trading down to 0.9189 earlier during the day, the market bounced off the key technical support level at 0.9195 (S1). The failure to close below the support might increase that levels importance as support going forward.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
As prices are trading close to September's high at 0.9246, upside momentum could accelerate should NZD/AUD mark new highs for the month.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Hikkake Pattern" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for NZD/AUD. Out of 122 times, NZDAUD closed higher 59.84% 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 63.93% with an average market move of 0.16%.