CADJPY still stuck within tight trading range
Canadian Dollar/Japanese Yen (CADJPY) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
CADJPY finished Thursday at 78.18 edging lower 18 pips (-0.23%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (CADJPY as at Mar 26, 2020):
Thursday's trading range has been 113 pips (1.44%), that's below the last trading month's daily average range of 192 pips. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CADJPY. Prices continued to consolidate within a tight trading range between 75.99 and 78.48 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. After moving higher in the previous session, the currency closed lower but above the prior day's open today, forming a bearish Harami Candle. Additionally, one bearish candlestick pattern matches today's price action, the Hanging Man.
Unable to break through the key technical resistance level at 78.40 (R1), CAD/JPY closed below it after spiking up to 78.44 earlier during the day. The failure to close above the resistance could increase that levels importance going forward. After having been unable to move above 78.48 in the previous session, the market ran into sellers again around the same price level today, missing to move higher than 78.44. The last time this happened on Tuesday, CADJPY actually gained 1.90% on the following trading day.
Although the pair is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could speed up should prices move above the close-by swing high at 78.48 where further buy stops might get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Harami Candle" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for CAD/JPY. Out of 110 times, CADJPY closed higher 54.55% of the time on the next trading day after the market condition occurred.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 2.72% and NZDUSD closing 1.88% higher. On the flipside the worst performers have been USDCHF closing -1.43% lower and USDJPY losing -1.42%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPHKD surging 2.72% and GBPZAR closing 2.65% higher. The worst performers of the day have been USDMXN tanking -4.12% and USDNOK closing -3.12% lower. Read more