GBPJPY closes higher for the 2nd day in a row
British Pound/Japanese Yen (GBPJPY) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, GBPJPY finished Wednesday at 136.09 gaining 18 pips (0.13%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (GBPJPY as at Sep 16, 2020):
Wednesday's trading range has been 91 pips (0.67%), that's below the last trading month's daily average range of 138 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for GBPJPY. Prices continued to consolidate within a tight trading range between 135.42 and 136.59 where it has been caught now for the last three trading days.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
Prices are trading close to the key technical support level at 135.29 (S1). The forex pair was bought again around 135.56 after having seen lows at 135.42, 135.57 and 135.58 in the last three trading sessions. Obviously there is something going on at that level.
While the pair is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might accelerate should prices move below the close-by swing low at 135.42 where further sell stops could get activated.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior three Highs" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for GBP/JPY. Out of 27 times, GBPJPY closed higher 59.26% 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 59.26% with an average market move of 0.33%.
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