JPYZAR still stuck within tight trading range
Japanese Yen/South African Rand (JPYZAR) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
JPYZAR finished Thursday at 0.1580 gaining 20 pips (1.28%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (JPYZAR as at Mar 26, 2020):
Thursday's trading range has been 52 pips (3.33%), that's slightly below the last trading month's daily average range of 63 pips. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for JPYZAR. Prices continued to consolidate within a tight trading range between 0.1543 and 0.1626 where it has been caught now for the whole last trading week.
Regardless of a weak opening the market managed to close above the previous day's open and close, forming a bullish Engulfing Candle. The last time this candlestick pattern showed up on February 6th, JPYZAR gained 1.40% on the following trading day.
Prices are trading close to the key technical support level at 0.1543 (S1). After having been unable to move lower than 0.1543 in the prior session, the currency found buyers again around the same price level today at 0.1548.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the nearby swing high at 0.1626 where further buy stops might get activated. Selling could accelerate should prices move below the close-by swing low at 0.1543 where further sell stops might get triggered. With prices trading close to this year's high at 0.1634, upside momentum could speed up should the FX pair be able to break out to new highs for the year.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for JPY/ZAR. Out of 848 times, JPYZAR closed higher 49.53% 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 10 trading days, showing a win rate of 55.54% with an average market move of 0.60%.