NZDEUR closes lower for the 8th day in a row
New Zealand Dollar/Euro (NZDEUR) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 8th day in a row, NZDEUR finished the month -2.05% lower at 0.5628 after losing 27 pips (-0.48%) today on high volume. Today's close at 0.5628 marks the lowest recorded closing price since May 29th. The bears were in full control today, moving the market lower 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 (NZDEUR as at Jul 31, 2020):
Friday's trading range has been 40 pips (0.71%), that's slightly above the last trading month's daily average range of 39 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NZDEUR.
One bearish candlestick pattern matches today's price action, the Black Candle.
After having been unable to move above 0.5661 in the previous session, the currency ran into sellers again around the same price level today, failing to move higher than 0.5657. The last time this happened on July 20th, NZDEUR actually gained 0.30% on the following trading day.
Crossing below the lower Bollinger Band for the first time since Wednesday, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 0.5738 or signal the beginning of a strong momentum breakout leading to even lower prices.
Although the forex 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.
Further selling might move prices lower should the market test June's nearby low at 0.5571.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Decisive Down Move" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for NZD/EUR. Out of 295 times, NZDEUR closed higher 51.19% of the time on the next trading day after the market condition occurred.