ZAREUR finds buyers at key support level
South African Rand/Euro (ZAREUR) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
ZAREUR ended Thursday at 0.0523 losing 7 pips (-1.32%). Closing below Wednesday's low at 0.0525, ZAR/EUR confirmed its breakout through the prior session low after trading up to 6 pips below it intraday.
Daily Candlestick Chart (ZAREUR as at Mar 26, 2020):
Thursday's trading range has been 13 pips (2.45%), that's below the last trading month's daily average range of 17 pips. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for ZAREUR.
Two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Last Engulfing Bottom Pattern showed up on March 20th, ZAREUR actually lost -1.51% on the following trading day.
After trading down to 0.0519 earlier during the day, the pair bounced off the key technical support level at 0.0522 (S1). The failure to close below the support might increase that levels significance as support going forward.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could accelerate should prices move above the nearby swing high at 0.0536 where further buy stops might get activated. Selling could speed up should prices move below the close-by swing low at 0.0519 where further sell stops might get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for ZAR/EUR. Out of 676 times, ZAREUR closed higher 50.44% 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 seven trading days, showing a win rate of 55.18% with an average market move of 0.12%.