ZARJPY closes lower for the 4th day in a row
South African Rand/Japanese Yen (ZARJPY) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, ZARJPY finished the month -0.32% lower at 6.20 after losing 5 pips (-0.8%) today. Today's close at 6.20 marks the lowest recorded closing price since June 24th.
Daily Candlestick Chart (ZARJPY as at Jul 31, 2020):
Friday's trading range has been 12 pips (1.92%), that's above the last trading month's daily average range of 10 pips. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for ZARJPY.
Prices are trading close to the key technical support level at 6.15 (S1).
Crossing below the lower Bollinger Band for the first time since April 3rd, prices have shown unusually strong downward momentum in the short-term. This might either indicate a potential selling climax after which prices could head back up towards the mean of the Bollinger Bands at 6.38 or signal the beginning of a strong momentum breakout leading to even lower prices. The last time prices broke out below the lower Bollinger Band on April 1st, ZARJPY lost -0.68% on the following trading day.
ZAR/JPY shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Further selling might move prices lower should the market test June's close-by low at 6.10.
Among the three 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/JPY. Out of 73 times, ZARJPY closed higher 60.27% 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 four trading days, showing a win rate of 52.05% with an average market move of 0.19%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are NZDUSD losing -1.04% and AUDUSD closing -0.72% lower. On the flipside the best performers have been USDJPY closing 1.12% higher and USDCHF gaining 0.48%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDZAR surging 1.87% and GBPZAR closing 1.79% higher. The worst performers of the day have been NZDCAD tanking -1.15% and NZDHKD closing -1.05% lower. Read more