ZARGBP pops to highest close since July 22nd
South African Rand/British Pound (ZARGBP) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, ZARGBP ended Wednesday at 0.0474 gaining 3 pips (0.64%). Today's close at 0.0474 marks the highest recorded closing price since July 22nd.
Daily Candlestick Chart (ZARGBP as at Sep 16, 2020):
Wednesday's trading range has been 4 pips (0.85%), that's far below the last trading month's daily average range of 7 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for ZARGBP.
After trading down to 0.0471 earlier during the day, the pair bounced off the key technical support level at 0.0472 (S1). The failure to close below the support could increase that levels importance as support going forward. When prices bounced off a significant support level the last time on Monday, ZARGBP gained 0.86% on the following trading day.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day though might signal a potential change in momentum that could lead to a correction back down towards the center of the Bollinger Bands at 0.0454.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Trading close to July's high at 0.0481 we might see further upside momentum if potential buy stops at the level get triggered.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close above the upper Bollinger Band" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for ZAR/GBP. Out of 126 times, ZARGBP closed lower 51.59% 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 50.00% with an average market move of -0.07%.