ZAREUR drops to lowest close since May 6th
South African Rand/Euro (ZAREUR) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, ZAREUR finished the month -3.12% lower at 0.0497 after tanking 7 pips (-1.39%) today on high volume. Today's close at 0.0497 marks the lowest recorded closing price since May 6th. Closing below Thursday's low at 0.0501, the currency confirmed its breakout through the previous session low after trading up to 6 pips below it intraday.
Daily Candlestick Chart (ZAREUR as at Jul 31, 2020):
Friday's trading range has been 10 pips (1.99%), that's far above the last trading month's daily average range of 7 pips. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for ZAREUR.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 0.0493 (S1).
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day although might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 0.0520.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for ZAR/EUR. Out of 65 times, ZAREUR closed higher 52.31% of the time on the next trading day after the market condition occurred.