FXY pushes through key technical resistance level
CurrencyShares Japanese Yen ETF (FXY) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, FXY finished Thursday at 86.67 gaining $1.49 (1.75%) on low volume. Trading up to $0.30 lower after the open, the ETF managed to reverse during the session as bulls took control ending the day above its opening price. Ending with a strong close near the high of the day sets a bullish note for the next session.
Daily Candlestick Chart (FXY as at Mar 26, 2020):
Thursday's trading range has been $0.66 (0.76%), that's below the last trading month's daily average range of $0.89. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for FXY.
One bearish candlestick pattern matches today's price action, the Bearish Hikkake Pattern. The last time a Bearish Hikkake Pattern showed up on March 5th, FXY actually gained 0.53% on the following trading day.
Buyers managed to take out the key technical resistance level at 86.65 (now S1), which is likely to act as support going forward.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
With prices trading close to this year's low at 84.62, downside momentum might speed up should FXY break out to new lows for the year.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Resistance R1" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for FXY. Out of 129 times, FXY closed lower 56.59% 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 five trading days, showing a win rate of 58.14% with an average market move of -0.07%.