JPYNZD breaks back below 100-day moving average
Japanese Yen/New Zealand Dollar (JPYNZD) Technical Analysis Report for Oct 23, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, JPYNZD ended the week -0.61% lower at 0.014273 after edging lower 13 pips (-0.09%) today. Trading 61 pips higher after the open, the FX pair was unable to hold its gains as the bears took control ending the day below 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 23, 2020):
Friday's trading range has been 94 pips (0.66%), that's below the last trading month's daily average range of 117 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.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After trading as low as 0.014253 during the day, the forex pair found support at the 50-day moving average at 0.014263. The market closed back below the 100-day moving average at 0.014283 for the first time since October 14th. When this moving average was crossed below the last time on October 9th, JPYNZD actually gained 0.59% on the following trading day. After having been unable to move lower than 0.014265 in the prior session, JPY/NZD found buyers again around the same price level today at 0.014253.
The currency shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
As prices are trading close to October's low at 0.014182, downside momentum might 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 Support/Resistance based market condition "Bullish Bounce off SMA 50" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for JPY/NZD. Out of 64 times, JPYNZD closed lower 59.38% 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 64.06% with an average market move of -0.62%.