NZDUSD closes below its opening price unable to hold early session gains
New Zealand Dollar/US Dollar (NZDUSD) Technical Analysis Report for Jan 24, 2020 | by Techniquant Editorial Team
NZDUSD ended the week -0.09% lower at 0.6607 after losing 12 pips (-0.18%) today. Trading 11 pips higher after the open, the pair was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (NZDUSD as at Jan 24, 2020):
Friday's trading range has been 30 pips (0.45%), that's far below the last trading month's daily average range of 43 pips. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for NZDUSD. Prices continued to consolidate within a tight trading range between 0.6581 and 0.6629 where it has been caught now for the whole last trading week.
After moving higher in the prior session, NZD/USD closed lower but above the previous day's open today, forming a bearish Harami Candle.
Prices are trading close to the key technical support level at 0.6581 (S1). After having been unable to move above 0.6627 in the prior session, the forex pair ran into sellers again around the same price level today, missing to move higher than 0.6629. The last time this happened on Wednesday, NZDUSD actually gained 0.38% on the following trading day.
Although 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 speed up should prices move below the nearby swing low at 0.6581 where further sell stops might get triggered.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for NZD/USD. Out of 422 times, NZDUSD closed higher 53.55% 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 seven trading days, showing a win rate of 49.29% with an average market move of 0.03%.
With four out of the other six Major FX Pairs closing lower today, the ones that stand out on the negative side are GBPUSD losing -0.41% and AUDUSD closing -0.34% lower. On the flipside the best performers have been USDCHF closing 0.23% higher and USDCAD gaining 0.14%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been USDNOK surging 0.57% and USDPLN closing 0.53% higher. The worst performers of the day have been GBPJPY tanking -0.6% and AUDJPY closing -0.53% lower. Read more