NZDSGD plummets, losing 82 pips (-0.89%) within a single day on high volume
New Zealand Dollar/Singapore Dollar (NZDSGD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
NZDSGD ended the month 1.3% higher at 0.9112 after tanking 82 pips (-0.89%) today on high volume. 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 within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (NZDSGD as at Jul 31, 2020):
Friday's trading range has been 101 pips (1.1%), that's far above the last trading month's daily average range of 60 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for NZDSGD.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Despite a strong opening the market closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
NZD/SGD closed below the 20-day moving average at 0.9151 for the first time since June 30th. The pair ran into sellers again today around 0.9207 for the third trading day in a row after having found sellers at 0.9197 in the previous session and at 0.9195 two days ago. The last time this happened on June 29th, NZDSGD actually gained 0.54% on the following trading day.
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.
Among the 14 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Decisive Down Move" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for NZD/SGD. Out of 199 times, NZDSGD closed higher 50.75% 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 56.78% with an average market move of 0.27%.
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