ZARJPY finds buyers at key support level
South African Rand/Japanese Yen (ZARJPY) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
ZARJPY finished the week 1.1% higher at 7.36 after edging higher 2 pips (0.27%) today. Trading up to 5 pips lower after the open, the currency managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (ZARJPY as at Feb 14, 2020):
Friday's trading range has been 13 pips (1.77%), that's slightly above the last trading month's daily average range of 12 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for ZARJPY.
Two candlestick patterns are matching today's price action, the Bullish High-Wave Candle and the Bullish Spinning Top which are both known as bullish patterns.
After trading down to 7.29 earlier during the day, the pair bounced off the key technical support level at 7.31 (S1). The failure to close below the support might increase that levels importance as support going forward. Unable to break through the key technical resistance level at 7.40 (R1), ZAR/JPY closed below it after spiking up to 7.42 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. After having been unable to move above 7.42 in the previous session, the FX pair ran into sellers again around the same price level today, missing to move higher than 7.42. The last time this happened on February 6th, ZARJPY lost -1.36% on the following trading day.
The market shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Buying might speed up should prices move above the nearby swing high at 7.47 where further buy stops could get triggered. With prices trading close to this year's low at 7.20, downside momentum might accelerate should the forex pair break out to new lows for the year.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for ZAR/JPY. Out of 592 times, ZARJPY closed higher 53.89% of the time on the next trading day after the market condition occurred.
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