EURJPY dominated by bears dragging the market lower throughout the day
Euro/Japanese Yen (EURJPY) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, EURJPY ended Wednesday at 123.95 tanking 97 pips (-0.78%). This is the biggest single-day loss in over three months. The last time we've seen such an unusually strong single-day loss on March 9th, EURJPY actually gained 1.75% on the following trading day. Today's close at 123.95 marks the lowest recorded closing price since July 29th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 124.76, the pair confirmed its breakout through the prior session low after trading up to 92 pips below it intraday.
Daily Candlestick Chart (EURJPY as at Sep 16, 2020):
Wednesday's trading range has been 118 pips (0.94%), that's above the last trading month's daily average range of 95 pips. Weekly volatility is also higher, being 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.
The market closed below the 50-day moving average at 124.57 for the first time since May 25th.
Crossing below the lower Bollinger Band for the first time since May 6th, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 125.47 or signal the beginning of a strong momentum breakout leading to even lower prices.
While the currency is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the 12 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 83 times, EURJPY closed higher 57.83% 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 50.60% with an average market move of 0.17%.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 0.61% and NZDUSD closing 0.27% higher. On the flipside the worst performers have been USDJPY closing -0.47% lower and EURUSD losing -0.25%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPPLN surging 0.81% and ZARJPY closing 0.78% higher. The worst performers of the day have been EURZAR tanking -1.42% and CHFZAR closing -1.28% lower. Read more