ZAREUR dominated by bulls lifting the market higher throughout the day
South African Rand/Euro (ZAREUR) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, ZAREUR ended Wednesday at 0.0520 gaining 7 pips (1.36%). Today's close at 0.0520 marks the highest recorded closing price since July 22nd. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Tuesday's high at 0.0515, ZAR/EUR confirmed its breakout through the previous session high after trading up to 7 pips above it intraday.
Daily Candlestick Chart (ZAREUR as at Sep 16, 2020):
Wednesday's trading range has been 10 pips (1.95%), that's slightly above the last trading month's daily average range of 9 pips. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for ZAREUR.
One bullish candlestick pattern matches today's price action, the White Candle.
After trading down to 0.0512 earlier during the day, the pair bounced off the key technical support level at 0.0512 (S1). The failure to close below the support could increase that levels significance as support going forward. Unable to break through the key technical resistance level at 0.0521 (R1), the market closed below it after spiking up to 0.0522 earlier during the day. The failure to close above the resistance might increase that levels importance going forward.
Crossing above the upper Bollinger Band for the first time since August 28th, prices have shown unusually strong upward momentum in the short-term. This could either indicate a potential buying climax after which prices might head back down towards the mean of the Bollinger Bands at 0.0503 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 August 28th, ZAREUR actually lost -2.17% on the following trading day.
The currency shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Trading close to July's high at 0.0531 we could see further upside momentum if potential buy stops at the level get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for ZAR/EUR. Out of 565 times, ZAREUR closed lower 49.56% 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 50.62% with an average market move of -0.22%.