ZARUSD still stuck within tight trading range
South African Rand/US Dollar (ZARUSD) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
ZARUSD ended Thursday at 0.0577 flat. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (ZARUSD as at Mar 26, 2020):
Thursday's trading range has been 12 pips (2.08%), 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 strongly higher than usual for ZARUSD. Prices continued to consolidate within a tight trading range between 0.0559 and 0.0583 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one neutral candlestick pattern matches today's price action, the Doji. The last time a Doji showed up on January 24th, ZARUSD lost -1.44% on the following trading day.
Prices are trading close to the key technical resistance level at 0.0582 (R1). After having been unable to move lower than 0.0567 in the prior session, the pair found buyers again around the same price level today at 0.0568.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might speed up should prices move above the close-by swing high at 0.0582 where further buy stops could get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Doji" stand out. While it is usually interpreted as neutral, it has actually shown to be bullish for ZAR/USD. Out of 145 times, ZARUSD closed higher 55.17% 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 two trading days, showing a win rate of 52.41% with an average market move of 0.12%.