NZDJPY stuck within tight trading range
New Zealand Dollar/Japanese Yen (NZDJPY) Technical Analysis Report for Jun 26, 2020 | by Techniquant Editorial Team
NZDJPY ended the week 0.55% higher at 68.87 after edging lower 5 pips (-0.07%) today on low volume. Trading 18 pips higher after the open, the currency was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on Tuesday, NZDJPY lost -0.78% on the following trading day. 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 (NZDJPY as at Jun 26, 2020):
Friday's trading range has been 46 pips (0.67%), that's far below the last trading month's daily average range of 105 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for NZDJPY. Prices continued to consolidate within a tight trading range between 68.42 and 69.40 where it has been caught now for the last three trading days.
Two candlestick patterns are matching today's price action, the Bearish Hikkake Pattern and the Bearish Spinning Top which are both known as bearish patterns.
After having been unable to move above 69.07 in the prior session, the FX pair ran into sellers again around the same price level today, missing to move higher than 69.10.
NZD/JPY shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might speed up should prices move above the close-by swing high at 69.67 where further buy stops could get activated. Selling might accelerate should prices move below the nearby swing low at 68.42 where further sell stops could get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Hikkake Pattern" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for NZD/JPY. Out of 106 times, NZDJPY closed higher 59.43% 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 58.49% with an average market move of 0.23%.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are GBPUSD losing -0.67% and AUDUSD closing -0.32% lower. On the flipside the best performers have been USDCAD closing 0.37% higher and USDJPY gaining 0.02%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDMXN surging 1.73% and CHFZAR closing 0.92% higher. The worst performers of the day have been ZARJPY tanking -0.8% and GBPCHF closing -0.7% lower. Read more