ZARCHF pops to highest close since July 27th
South African Rand/Swiss Franc (ZARCHF) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, ZARCHF ended Wednesday at 0.0559 gaining 7 pips (1.27%). Today's close at 0.0559 marks the highest recorded closing price since July 27th. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Tuesday's high at 0.0554, the FX pair confirmed its breakout through the previous session high after trading up to 6 pips above it intraday.
Daily Candlestick Chart (ZARCHF as at Sep 16, 2020):
Wednesday's trading range has been 9 pips (1.63%), that's slightly below the last trading month's daily average range of 10 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 slightly lower than usual for ZARCHF.
One bullish candlestick pattern matches today's price action, the White Candle.
Prices are trading close to the key technical resistance level at 0.0561 (R1).
Crossing above the upper Bollinger Band for the first time since September 1st, prices have shown unusually strong upward momentum in the short-term. This might either indicate a potential buying climax after which prices could head back down towards the mean of the Bollinger Bands at 0.0542 or signal the beginning of a strong momentum breakout leading to even higher prices. The last time prices broke out above the upper Bollinger Band on September 1st, ZARCHF actually lost -0.73% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Trading close to July's high at 0.0571 we might see further upside momentum if potential buy stops at the level get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed above the upper Bollinger Band" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for ZAR/CHF. Out of 58 times, ZARCHF closed lower 55.17% 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 75.86% with an average market move of -1.55%.