NZDEUR breaks back below 20-day moving average
New Zealand Dollar/Euro (NZDEUR) Technical Analysis Report for Sep 13, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, NZDEUR finished the week -1.2% lower at 0.5759 after tanking 33 pips (-0.57%) today. This is the biggest single-day loss in over a month. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 0.5783, the forex pair confirmed its breakout through the prior session low after trading up to 32 pips below it intraday.
Daily Candlestick Chart (NZDEUR as at Sep 13, 2019):
Friday's trading range has been 42 pips (0.73%), that's slightly below the last trading month's daily average range of 42 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for NZDEUR.
One bearish candlestick pattern matches today's price action, the Black Candle.
The pair closed back below the 20-day moving average at 0.5770 for the first time since September 2nd. When this moving average was crossed below the last time on July 29th, NZDEUR lost -0.37% on the following trading day.
While the market is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
With prices trading close to this year's low at 0.5684, downside momentum might speed up should the FX pair break out to new lows for the year. As prices are trading close to September's low at 0.5723, downside momentum could accelerate should NZD/EUR mark new lows for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for NZD/EUR. Out of 316 times, NZDEUR closed higher 54.75% 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 52.22% with an average market move of 0.09%.