ZARUSD pushes through Tuesday's high
South African Rand/US Dollar (ZARUSD) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, ZARUSD finished Wednesday at 0.0615 gaining 7 pips (1.15%). Today's close at 0.0615 marks the highest recorded closing price since March 13th. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Tuesday's high at 0.0610, the FX pair confirmed its breakout through the previous session high after trading up to 7 pips above it intraday.
Daily Candlestick Chart (ZARUSD as at Sep 16, 2020):
Wednesday's trading range has been 10 pips (1.64%), that's slightly below the last trading month's daily average range of 11 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for ZARUSD.
One bullish candlestick pattern matches today's price action, the White Candle.
The forex pair managed to close above the 200-day moving average at 0.0608 for the first time since January 28th.
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 might either indicate a potential buying climax after which prices could head back down towards the mean of the Bollinger Bands at 0.0596 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, ZARUSD actually lost -2.16% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed above the upper Bollinger Band" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for ZAR/USD. Out of 71 times, ZARUSD closed lower 60.56% 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 60.56% with an average market move of -0.91%.