NZDJPY closes lower for the 2nd day in a row
New Zealand Dollar/Japanese Yen (NZDJPY) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, NZDJPY ended Wednesday at 70.65 losing 14 pips (-0.2%). Trading 22 pips higher after the open, the 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 (NZDJPY as at Sep 16, 2020):
Wednesday's trading range has been 51 pips (0.72%), that's below the last trading month's daily average range of 68 pips. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NZDJPY.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After trading as low as 70.50 during the day, the FX pair found support at the 20-day moving average at 70.63. The last time this happened on July 24th, NZDJPY actually lost -0.07% on the following trading day.
Though the market is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might speed up should prices move above the close-by swing high at 71.22 where further buy stops could get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 20" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for NZD/JPY. Out of 158 times, NZDJPY closed lower 53.80% 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 55.70% with an average market move of -0.30%.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 0.61% and NZDUSD closing 0.27% higher. On the flipside the worst performers have been USDJPY closing -0.47% lower and EURUSD losing -0.25%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPPLN surging 0.81% and ZARJPY closing 0.78% higher. The worst performers of the day have been EURZAR tanking -1.42% and CHFZAR closing -1.28% lower. Read more