FXY closes within prior day's range after lackluster session
CurrencyShares Japanese Yen ETF (FXY) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
FXY ended the week -0.03% lower at 86.49 after edging lower $0.01 (-0.01%) today ahead of tomorrow's Presidents' Day market holiday. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (FXY as at Feb 14, 2020):
Friday's trading range has been $0.09 (0.1%), that's below the last trading month's daily average range of $0.22. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for FXY.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar.
Prices are trading close to the key technical resistance level at 86.65 (R1). After having been unable to move lower than 86.43 in the prior session, the market found buyers again around the same price level today at 86.46. The last time this happened on Monday, FXY actually lost -0.03% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could accelerate should prices move above the nearby swing high at 86.58 where further buy stops might get activated. Selling could speed up should prices move below the close-by swing low at 86.24 where further sell stops might get triggered. With prices trading close to this year's low at 86.18, downside momentum could accelerate should the ETF break out to new lows for the year.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous low" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for FXY. Out of 408 times, FXY closed lower 51.72% 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 52.94% with an average market move of -0.08%.