NZDCHF snaps to lowest close since June 1st
New Zealand Dollar/Swiss Franc (NZDCHF) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
NZDCHF ended the month -0.98% lower at 0.6055 after losing 35 pips (-0.57%) today on high volume. Today's close at 0.6055 marks the lowest recorded closing price since June 1st. The bears were in full control today, moving the market lower throughout the whole session. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (NZDCHF as at Jul 31, 2020):
Friday's trading range has been 45 pips (0.74%), that's slightly below the last trading month's daily average range of 49 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 NZDCHF.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle.
Prices broke below the key technical support level at 0.6062 (now R1), which is likely to act as resistance going forward. After having been unable to move lower than 0.6048 in the previous session, the market found buyers again around the same price level today at 0.6050. The last time this happened on Tuesday, NZDCHF actually lost -0.44% on the following trading day.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day although might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 0.6151.
While the FX pair is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could accelerate should prices move below the nearby swing low at 0.6048 where further sell stops might get triggered.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Bottom Pattern" stand out. Its common bullish interpretation has been confirmed for NZD/CHF. Out of 66 times, NZDCHF closed higher 53.03% 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 56.06% with an average market move of 0.17%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are NZDUSD losing -1.04% and AUDUSD closing -0.72% lower. On the flipside the best performers have been USDJPY closing 1.12% higher and USDCHF gaining 0.48%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDZAR surging 1.87% and GBPZAR closing 1.79% higher. The worst performers of the day have been NZDCAD tanking -1.15% and NZDHKD closing -1.05% lower. Read more