EURJPY closes lower for the 2nd day in a row
Euro/Japanese Yen (EURJPY) Technical Analysis Report for Aug 10, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, EURJPY ended Monday at 124.36 losing 49 pips (-0.39%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Friday's low at 124.46, the market confirmed its breakout through the prior session low after trading up to 12 pips below it intraday.
Daily Candlestick Chart (EURJPY as at Aug 10, 2020):
Monday's trading range has been 60 pips (0.48%), that's far below the last trading month's daily average range of 85 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for EURJPY.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Bearish Short Candle showed up on June 19th, EURJPY actually gained 0.77% on the following trading day.
Prices broke below the key technical support level at 124.43 (now R1), which is likely to act as resistance going forward. After having been unable to move lower than 124.46 in the previous session, EUR/JPY found buyers again around the same price level today at 124.34.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Short Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for EUR/JPY. Out of 45 times, EURJPY closed higher 57.78% 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 two trading days, showing a win rate of 51.11% with an average market move of -0.03%.
With four out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are EURUSD losing -0.42% and USDCAD closing -0.25% lower. On the flipside the best performers have been USDCHF closing 0.34% higher and GBPUSD gaining 0.17%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDTRY surging 1.04% and CADCHF closing 0.6% higher. The worst performers of the day have been TRYJPY tanking -0.96% and EURCAD closing -0.67% lower. Read more