EURJPY breaks below 200-day moving average for the first time since January 7th
Euro/Japanese Yen (EURJPY) Technical Analysis Report for Jan 24, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, EURJPY ended the week -1.39% lower at 120.47 after losing 61 pips (-0.5%) today. Today's close at 120.47 marks the lowest recorded closing price since December 9, 2019. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 120.64, the forex pair confirmed its breakout through the previous session low after trading up to 22 pips below it intraday.
Daily Candlestick Chart (EURJPY as at Jan 24, 2020):
Friday's trading range has been 85 pips (0.7%), that's slightly above the last trading month's daily average range of 73 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for EURJPY.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 120.29 (S1). The FX pair closed below the 200-day moving average at 120.83 for the first time since January 7th. When this moving average was crossed below the last time on January 7th, EURJPY actually gained 0.20% on the following trading day.
Although the market is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could speed up should prices move below the nearby swing low at 120.18 where further sell stops might get activated. With prices trading close to this year's low at 120.17, downside momentum could accelerate should the currency break out to new lows for the year. Further selling might move prices lower should the market test December's close-by low at 119.99.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 200" stand out. Its common bearish interpretation has been confirmed for EUR/JPY. Out of 32 times, EURJPY closed lower 53.13% 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 GBPUSD losing -0.41% and AUDUSD closing -0.34% lower. On the flipside the best performers have been USDCHF closing 0.23% higher and USDCAD gaining 0.14%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDNOK surging 0.57% and USDPLN closing 0.53% higher. The worst performers of the day have been GBPJPY tanking -0.6% and AUDJPY closing -0.53% lower. Read more