NZDJPY closes below its opening price unable to hold early session gains
New Zealand Dollar/Japanese Yen (NZDJPY) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, NZDJPY ended the week 0.51% higher at 70.63 after losing 7 pips (-0.1%) today on low volume. Trading 9 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 below Thursday's low at 70.66, the market confirmed its breakout through the prior session low after trading up to 13 pips below it intraday.
Daily Candlestick Chart (NZDJPY as at Feb 14, 2020):
Friday's trading range has been 26 pips (0.37%), that's far below the last trading month's daily average range of 62 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NZDJPY.
Two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern and one bearish pattern, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on February 6th, NZDJPY lost -1.07% on the following trading day.
After trading down to 70.53 earlier during the day, the currency bounced off the key technical support level at 70.54 (S1). The failure to close below the support could increase that levels importance as support going forward.
NZD/JPY shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
With prices trading close to this year's low at 69.95, downside momentum might accelerate should the forex pair break out to new lows for the year.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for NZD/JPY. Out of 355 times, NZDJPY closed higher 58.59% 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 51.83% with an average market move of 0.28%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are USDCAD losing -0.12% and EURUSD closing -0.08% lower. On the flipside the best performers have been USDCHF closing 0.28% higher and GBPUSD gaining 0.02%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDSEK surging 0.51% and EURSEK closing 0.43% higher. The worst performers of the day have been EURHUF tanking -0.65% and USDHUF closing -0.58% lower. Read more