ZARCHF finds buyers at key support level
South African Rand/Swiss Franc (ZARCHF) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
ZARCHF ended the month -0.36% lower at 0.0546 after losing 5 pips (-0.91%) today.
Daily Candlestick Chart (ZARCHF as at Jun 30, 2020):
Tuesday's trading range has been 8 pips (1.45%), that's slightly 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.
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. Regardless of a strong opening the pair closed below the prior day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on June 11th, ZARCHF actually gained 1.64% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 0.0544 earlier during the day, the forex pair bounced off the key technical support level at 0.0544 (S1). The failure to close below the support could increase that levels significance as support going forward. After having been unable to move above 0.0551 in the previous session, ZAR/CHF ran into sellers again around the same price level today, missing to move higher than 0.0552.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling might speed up should prices move below the close-by swing low at 0.0541 where further sell stops could get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for ZAR/CHF. Out of 522 times, ZARCHF closed higher 50.38% of the time on the next trading day after the market condition occurred.