JPYCAD pushes through key technical resistance level
Japanese Yen/Canadian Dollar (JPYCAD) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, JPYCAD finished the week -1.31% lower at 0.013007 after gaining 40 pips (0.31%) today. Closing above Thursday's high at 0.012975, JPY/CAD confirmed its breakout through the prior session high after trading up to 92 pips above it intraday.
Daily Candlestick Chart (JPYCAD as at May 22, 2020):
Friday's trading range has been 129 pips (0.99%), that's slightly above the last trading month's daily average range of 128 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for JPYCAD.
Buyers managed to take out the key technical resistance level at 0.012977 (now S1), which is likely to act as support going forward. The last time this happened on May 15th, JPYCAD actually lost -1.46% on the following trading day. After spiking up to 0.013067 during the day, the pair found resistance at the 50-day moving average at 0.013061.
While the market is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Further selling might move prices lower should the market test April's nearby low at 0.012789.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 50" stand out. Its common bearish interpretation has been confirmed for JPY/CAD. Out of 109 times, JPYCAD closed lower 50.46% 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 four trading days, showing a win rate of 53.21% with an average market move of -0.02%.