ZARCHF finds buyers again around 0.0654
South African Rand/Swiss Franc (ZARCHF) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
ZARCHF ended the week 1.54% higher at 0.0658 after gaining 3 pips (0.46%) today. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (ZARCHF as at Feb 14, 2020):
Friday's trading range has been 7 pips (1.07%), that's below the last trading month's daily average range of 10 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for ZARCHF. Prices continued to consolidate within a tight trading range between 0.0653 and 0.0662 where it has been caught now for the last three trading days.
After moving lower in the previous session, the pair managed to close higher but below the prior day's open, forming a bullish Harami Candle.
Prices are trading close to the key technical support level at 0.0653 (S1). After spiking up to 0.0661 during the day, the FX pair found resistance at the 20-day moving average at 0.0660. After having been unable to move lower than 0.0653 in the previous session, the market found buyers again around the same price level today at 0.0654. The last time this happened on February 6th, ZARCHF actually lost -0.92% on the following trading day.
Though ZAR/CHF is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might speed up should prices move above the nearby swing high at 0.0662 where further buy stops could get triggered. Selling might accelerate should prices move below the close-by swing low at 0.0653 where further sell stops could get activated. With prices trading close to this year's low at 0.0640, downside momentum might speed up should the currency break out to new lows for the year.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 20" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for ZAR/CHF. Out of 206 times, ZARCHF closed higher 51.94% 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 59.22% with an average market move of 0.42%.