ZARCHF runs into sellers again around 0.0553
South African Rand/Swiss Franc (ZARCHF) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
ZARCHF finished the week 5.35% higher at 0.0551 after flat today. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (ZARCHF as at May 22, 2020):
Friday's trading range has been 10 pips (1.81%), that's slightly below the last trading month's daily average range of 11 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for ZARCHF.
Four candlestick patterns are matching today's price action, the Tweezer Top which is known as bullish pattern, two bearish patterns, the Hanging Man and the Northern Doji and one neutral pattern, the Doji. The last time a Northern Doji showed up on Tuesday, ZARCHF actually gained 1.51% on the following trading day.
After having been unable to move above 0.0553 in the previous session, the currency ran into sellers again around the same price level today, missing to move higher than 0.0553.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day although could signal a potential change in momentum that might lead to a correction back down towards the center of the Bollinger Bands at 0.0528.
While the pair is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. Its common bearish interpretation has been confirmed for ZAR/CHF. Out of 62 times, ZARCHF closed lower 62.90% 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 64.52% with an average market move of -0.77%.