JPYCAD breaks below Thursday's low
Japanese Yen/Canadian Dollar (JPYCAD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
JPYCAD ended the month 0.73% higher at 0.012669 after tanking 148 pips (-1.15%) today on high volume. This is the biggest single-day loss in over a month. Closing below Thursday's low at 0.012687, JPY/CAD confirmed its breakout through the prior session low after trading up to 45 pips below it intraday.
Daily Candlestick Chart (JPYCAD as at Jul 31, 2020):
Friday's trading range has been 243 pips (1.89%), that's far above the last trading month's daily average range of 102 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for JPYCAD.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Despite a strong opening the market closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After trading as low as 0.012642 during the day, the FX pair found support at the 50-day moving average at 0.012643. The last time this happened on May 15th, JPYCAD actually lost -1.46% on the following trading day. After spiking up to 0.012885 during the day, the currency found resistance at the 100-day moving average at 0.012852.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 0.012656.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 20" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for JPY/CAD. Out of 151 times, JPYCAD closed lower 50.33% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 55.63% with an average market move of -0.05%.