GBPJPY runs into sellers again around 131.78
British Pound/Japanese Yen (GBPJPY) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, GBPJPY ended the week 1.03% higher at 130.93 after losing 59 pips (-0.45%) today on low volume. Closing below Thursday's low at 131.22, the Geppy confirmed its breakout through the previous session low after trading up to 54 pips below it intraday.
Daily Candlestick Chart (GBPJPY as at May 22, 2020):
Friday's trading range has been 110 pips (0.84%), that's slightly below the last trading month's daily average range of 136 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for GBPJPY.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on May 15th, GBPJPY actually gained 0.97% on the following trading day.
After having been unable to move above 131.95 in the prior session, the FX pair ran into sellers again around the same price level today, missing to move higher than 131.78.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for GBP/JPY. Out of 165 times, GBPJPY closed higher 52.73% 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 six trading days, showing a win rate of 50.30% 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