JPYNZD stuck within tight trading range
Japanese Yen/New Zealand Dollar (JPYNZD) Technical Analysis Report for Oct 14, 2020 | by Techniquant Editorial Team
JPYNZD ended Wednesday at 0.014284 gaining 29 pips (0.2%). Trading up to 42 pips lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on September 18th, JPYNZD gained 1.32% on the following trading day. 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 (JPYNZD as at Oct 14, 2020):
Wednesday's trading range has been 89 pips (0.62%), that's below the last trading month's daily average range of 130 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for JPYNZD. Prices continued to consolidate within a tight trading range between 0.014188 and 0.014325 where it has been caught now for the last three trading days.
Even with a weak opening the currency managed to close above the previous day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the Tweezer Bottom.
After trading down to 0.014213 earlier during the day, the pair bounced off the key technical support level at 0.014213 (S1). The failure to close below the support might increase that levels significance as support going forward. Prices are trading close to the key technical resistance level at 0.014347 (R1). After having been unable to move lower than 0.014213 in the prior session, the FX pair found buyers again around the same price level today at 0.014213.
The forex pair shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could speed up should prices move above the close-by swing high at 0.014325 where further buy stops might get triggered. Selling could accelerate should prices move below the nearby swing low at 0.014182 where further sell stops might get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bullish Intraday Reversal" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for JPY/NZD. Out of 363 times, JPYNZD closed lower 56.75% 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 52.07% with an average market move of -0.13%.