EURJPY finds buyers at key support level
Euro/Japanese Yen (EURJPY) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, EURJPY ended the week 1.27% higher at 117.35 after losing 49 pips (-0.42%) today. Closing below Thursday's low at 117.73, the currency confirmed its breakout through the previous session low after trading up to 73 pips below it intraday.
Daily Candlestick Chart (EURJPY as at May 22, 2020):
Friday's trading range has been 98 pips (0.83%), that's slightly above the last trading month's daily average range of 94 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.
After trading down to 117.00 earlier during the day, the FX pair bounced off the key technical support level at 117.22 (S1). The failure to close below the support might increase that levels significance as support going forward. The pair closed back below the 50-day moving average at 117.43. When this moving average was crossed below the last time on March 30th, EURJPY lost -0.31% on the following trading day.
Though the market is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 50" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for EUR/JPY. Out of 84 times, EURJPY closed higher 58.33% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 50.00% with an average market move of 0.10%.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are GBPUSD losing -0.47% and EURUSD closing -0.44% lower. On the flipside the best performers have been USDCAD closing 0.33% higher and USDCHF gaining 0.08%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDCZK surging 1.09% and USDHUF closing 0.9% higher. The worst performers of the day have been USDMXN tanking -0.58% and SGDHKD closing -0.51% lower. Read more