JPYCHF closes higher for the 2nd day in a row
Japanese Yen/Swiss Franc (JPYCHF) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, JPYCHF finished the week -0.56% lower at 0.009023 after edging higher 5 pips (0.06%) today. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (JPYCHF as at May 22, 2020):
Friday's trading range has been 45 pips (0.5%), that's slightly below the last trading month's daily average range of 713900 pips. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for JPYCHF. Prices continued to consolidate within a tight trading range between 0.008956 and 0.009099 where it has been caught now for the whole last trading week.
Prices are trading close to the key technical support level at 0.008901 (S1). After spiking up to 0.009054 during the day, the forex pair found resistance at the 200-day moving average at 0.009038. The last time this happened on May 4th, JPYCHF actually gained 0.93% on the following trading day. JPY/CHF was bought again around 0.009009 after having seen lows at 0.008956, 0.008967 and 0.008986 in the last three trading sessions. Obviously there is something going on at that level.
Though the pair is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could speed up should prices move above the nearby swing high at 0.009116 where further buy stops might get activated. Selling could accelerate should prices move below the close-by swing low at 0.008956 where further sell stops might get triggered. With prices trading close to this year's low at 0.008742, downside momentum could speed up should the market break out to new lows for the year. As prices are trading close to May's high at 0.009200, upside momentum might accelerate should the FX pair mark new highs for the month. Trading close to March's low at 0.008772 we could see further downside momentum if potential sell stops at the level get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior three Lows" stand out. Its common bullish interpretation has been confirmed for JPY/CHF. Out of 67 times, JPYCHF closed higher 56.72% 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 four trading days, showing a win rate of 49.25% with an average market move of -0.03%.