ZARJPY still stuck within tight trading range
South African Rand/Japanese Yen (ZARJPY) Technical Analysis Report for Jun 01, 2020 | by Techniquant Editorial Team
ZARJPY finished Monday at 6.20 gaining 5 pips (0.81%). Trading up to 4 pips lower after the open, the FX pair managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on May 27th, ZARJPY actually lost -0.81% on the following trading day. Closing above Friday's high at 6.16, the currency confirmed its breakout through the previous session high after trading up to 4 pips above it intraday.
Daily Candlestick Chart (ZARJPY as at Jun 01, 2020):
Monday's trading range has been 10 pips (1.63%), that's below the last trading month's daily average range of 12 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for ZARJPY. Prices continued to consolidate within a tight trading range between 6.08 and 6.24 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Last Engulfing Top Pattern.
Prices are trading close to the key technical resistance level at 6.28 (R1).
Though the pair is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might speed up should prices move above the close-by swing high at 6.24 where further buy stops could get activated. Selling might accelerate should prices move below the nearby swing low at 6.08 where further sell stops could get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Up Close near high of period" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for ZAR/JPY. Out of 579 times, ZARJPY closed lower 53.54% 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 51.64% with an average market move of -0.24%.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are AUDUSD gaining 1.93% and NZDUSD closing 1.43% higher. On the flipside the worst performers have been USDCAD closing -1.43% lower and USDJPY losing -0.21%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been AUDHKD surging 1.93% and AUDCHF closing 1.9% higher. The worst performers of the day have been EURAUD tanking -1.65% and USDPLN closing -1.36% lower. Read more