ZARJPY runs into sellers around 7.86 for the forth day in a row
South African Rand/Japanese Yen (ZARJPY) Technical Analysis Report for Jan 11, 2019 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, ZARJPY finished the week 0.9% higher at 7.84 after gaining 2 pips (0.26%) today. Today's close at 7.84 marks the highest recorded closing price since December 14, 2018. Trading up to 2 pips lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (ZARJPY as at Jan 11, 2019):
Friday's trading range has been 6 pips (0.77%), that's far below the last trading month's daily average range of 14 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 ZARJPY. Prices continued to consolidate within a tight trading range between 7.73 and 7.86 where it has been caught now for the whole last trading week.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
Buyers managed to take out the key technical resistance level at 7.83 (now S1), which is likely to act as support going forward. The last time this happened on Monday, ZARJPY actually lost -0.51% on the following trading day. ZAR/JPY was sold again around 7.86 after having seen highs at 7.84, 7.86 and 7.84 in the last three trading sessions. Obviously there is something going on at that level.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the nearby swing high at 7.86 where further buy stops could get activated. Selling might speed up should prices move below the close-by swing low at 7.74 where further sell stops could get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior three Highs" stand out. Its common bearish interpretation has been confirmed for ZAR/JPY. Out of 66 times, ZARJPY closed lower 53.03% 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 57.58% with an average market move of -0.60%.
With five out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 0.71% and NZDUSD closing 0.69% higher. On the flipside the worst performers have been EURUSD closing -0.27% lower and USDCHF losing -0.09%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been NZDCAD surging 0.98% and GBPCAD closing 0.97% higher. The worst performers of the day have been EURNZD tanking -1.04% and EURGBP closing -0.99% lower. Read more