CHFJPY finds buyers at key support level
Swiss Franc/Japanese Yen (CHFJPY) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 6th day in a row, CHFJPY ended Thursday at 113.87 edging higher 5 pips (0.04%). Today's close at 113.87 marks the highest recorded closing price since February 21st. Trading up to 93 pips lower after the open, the pair managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (CHFJPY as at Mar 26, 2020):
Thursday's trading range has been 111 pips (0.98%), that's below the last trading month's daily average range of 163 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CHFJPY. Prices continued to consolidate within a tight trading range between 112.47 and 114.00 where it has been caught now for the last three trading days.
Four candlestick patterns are matching today's price action, the Tweezer Top which is known as bullish pattern, two bearish patterns, the Hanging Man and the Northern Doji and one neutral pattern, the Doji. The last time a Northern Doji showed up on January 10th, CHFJPY actually gained 0.61% on the following trading day.
After trading down to 112.89 earlier during the day, the FX pair bounced off the key technical support level at 113.25 (S2). The failure to close below the support might increase that levels significance as support going forward. CHF/JPY ran into sellers again today around 114.00 for the third trading day in a row after having found sellers at 114.00 in the previous session and at 113.78 two days ago.
The forex pair shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
With prices trading close to this year's high at 114.39, upside momentum could speed up should the currency be able to break out to new highs for the year. Further buying might move prices higher should the market test February's nearby high at 114.28.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "6 Consecutive Higher Closes" stand out. Its common bullish interpretation has been confirmed for CHF/JPY. Out of 23 times, CHFJPY closed higher 78.26% 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 10 trading days, showing a win rate of 65.22% with an average market move of 0.58%.
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