JPYNZD finds buyers at key support level
Japanese Yen/New Zealand Dollar (JPYNZD) Technical Analysis Report for Oct 19, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, JPYNZD ended Monday at 0.014355 edging lower 5 pips (-0.03%). Trading up to 67 pips lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (JPYNZD as at Oct 19, 2020):
Monday's trading range has been 94 pips (0.66%), that's below the last trading month's daily average range of 121 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.
Three candlestick patterns are matching today's price action, the Bullish Hikkake Pattern and the Bullish Spinning Top which are both known as bullish patterns and one bearish pattern, the Hanging Man. The last time a Bullish Spinning Top showed up on September 18th, JPYNZD gained 1.32% on the following trading day.
After trading down to 0.014282 earlier during the day, the FX pair bounced off the key technical support level at 0.014347 (S1). The failure to close below the support might increase that levels significance as support going forward.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the nearby swing high at 0.014447 where further buy stops might get triggered. As prices are trading close to October's low at 0.014182, downside momentum could accelerate should the pair mark new lows for the month.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. Its common bearish interpretation has been confirmed for JPY/NZD. Out of 47 times, JPYNZD closed lower 68.09% 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 nine trading days, showing a win rate of 63.83% with an average market move of -0.21%.