NZDCHF pushes through key technical resistance level
New Zealand Dollar/Swiss Franc (NZDCHF) Technical Analysis Report for Jan 23, 2020 | by Techniquant Editorial Team
NZDCHF ended Thursday at 0.6414 surging 32 pips (0.5%). This is the biggest single-day gain in over four weeks. The bulls were in full control today, moving the market higher throughout the whole session. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (NZDCHF as at Jan 23, 2020):
Thursday's trading range has been 48 pips (0.75%), that's slightly above the last trading month's daily average range of 44 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NZDCHF. Prices continued to consolidate within a tight trading range between 0.6374 and 0.6422 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. Despite a weak opening the pair managed to close above the previous day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
Buyers managed to take out the key technical resistance level at 0.6388 (now S1), which is likely to act as support going forward. The currency found buyers again today around 0.6374 for the third trading day in a row after having found demand at 0.6379 in the prior session and at 0.6377 two days ago. The last time this happened on January 13th, NZDCHF actually lost -0.57% on the following trading day.
Though the FX pair is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might accelerate should prices move above the close-by swing high at 0.6424 where further buy stops could get activated.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous two Lows" stand out. Its common bullish interpretation has been confirmed for NZD/CHF. Out of 176 times, NZDCHF closed higher 54.55% 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 57.39% with an average market move of 0.26%.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are EURUSD losing -0.34% and USDJPY closing -0.32% lower. On the flipside the best performers have been NZDUSD closing 0.38% higher and USDCHF gaining 0.11%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been NZDSGD surging 0.57% and USDPLN closing 0.53% higher. The worst performers of the day have been ZARJPY tanking -0.91% and EURNZD closing -0.72% lower. Read more