EURJPY finds buyers at key support level
Euro/Japanese Yen (EURJPY) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
EURJPY ended Thursday at 120.93 edging lower 10 pips (-0.08%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (EURJPY as at Mar 26, 2020):
Thursday's trading range has been 115 pips (0.95%), that's far below the last trading month's daily average range of 191 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for EURJPY.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. After moving higher in the previous session, the FX pair closed lower but above the prior day's open today, forming a bearish Harami Candle. Additionally, one bearish candlestick pattern matches today's price action, the Hanging Man.
After trading down to 119.96 earlier during the day, the currency bounced off the key technical support level at 120.10 (S2). The failure to close below the support could increase that levels importance as support going forward. When prices bounced off a significant support level the last time on October 10, 2019, EURJPY gained 0.74% on the following trading day. After having been unable to move above 121.15 in the previous session, the market ran into sellers again around the same price level today, missing to move higher than 121.11.
EUR/JPY shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Buying might accelerate should prices move above the nearby swing high at 121.15 where further buy stops could get activated. With prices trading close to this year's high at 122.87, upside momentum might speed up should the pair be able to break out to new highs for the year. Further buying could move prices higher should the market test February's close-by high at 121.40.
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 S2" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for EUR/JPY. Out of 38 times, EURJPY closed lower 52.63% of the time on the next trading day after the market condition occurred.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 2.72% and NZDUSD closing 1.88% higher. On the flipside the worst performers have been USDCHF closing -1.43% lower and USDJPY losing -1.42%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPHKD surging 2.72% and GBPZAR closing 2.65% higher. The worst performers of the day have been USDMXN tanking -4.12% and USDNOK closing -3.12% lower. Read more