GBPJPY breaks above 200-day moving average for the first time since June 8th
British Pound/Japanese Yen (GBPJPY) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, GBPJPY ended the month 3.5% higher at 138.54 after surging 139 pips (1.01%) today on high volume. This is the biggest single-day gain in over a month. Today's close at 138.54 marks the highest recorded closing price since June 5th. Closing above Thursday's high at 137.39, the currency confirmed its breakout through the previous session high after trading up to 181 pips above it intraday.
Daily Candlestick Chart (GBPJPY as at Jul 31, 2020):
Friday's trading range has been 240 pips (1.75%), that's far above the last trading month's daily average range of 103 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 GBPJPY.
One bullish candlestick pattern matches today's price action, the White Candle.
The market managed to close above the 200-day moving average at 137.51 for the first time since June 8th. When this moving average was crossed above the last time on June 4th, GBPJPY gained 0.98% on the following trading day.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day though might signal a potential change in momentum that could lead to a correction back down towards the center of the Bollinger Bands at 135.57.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Further buying might move prices higher should the market test June's close-by high at 139.74.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(14) above 70" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for GBP/JPY. Out of 41 times, GBPJPY closed higher 60.98% 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 56.10% with an average market move of 0.25%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are NZDUSD losing -1.04% and AUDUSD closing -0.72% lower. On the flipside the best performers have been USDJPY closing 1.12% higher and USDCHF gaining 0.48%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDZAR surging 1.87% and GBPZAR closing 1.79% higher. The worst performers of the day have been NZDCAD tanking -1.15% and NZDHKD closing -1.05% lower. Read more