SGDNZD stuck within tight trading range
Singapore Dollar/New Zealand Dollar (SGDNZD) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
SGDNZD ended Wednesday at 1.0933 losing 12 pips (-0.11%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (SGDNZD as at Sep 16, 2020):
Wednesday's trading range has been 56 pips (0.51%), that's below the last trading month's daily average range of 83 pips. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for SGDNZD. Prices continued to consolidate within a tight trading range between 1.0904 and 1.0979 where it has been caught now for the last three trading days.
One bullish candlestick pattern matches today's price action, the Last Engulfing Bottom Pattern. The last time a Last Engulfing Bottom Pattern showed up on July 27th, SGDNZD gained 0.35% on the following trading day.
After trading down to 1.0904 earlier during the day, the forex pair bounced off the key technical support level at 1.0930 (S1). The failure to close below the support could increase that levels significance as support going forward.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might accelerate should prices move above the close-by swing high at 1.1005 where further buy stops could get activated. With prices trading close to this year's low at 1.0806, downside momentum might speed up should the currency break out to new lows for the year. As prices are trading close to September's low at 1.0827, downside momentum could accelerate should the FX pair mark new lows for the month.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. While it is usually interpreted as neutral, it has actually shown to be bearish for SGD/NZD. Out of 767 times, SGDNZD closed lower 51.63% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 52.41% with an average market move of -0.07%.