JPYCHF closes lower for the 3rd day in a row
Japanese Yen/Swiss Franc (JPYCHF) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, JPYCHF finished the month -1.74% lower at 0.008624 after tanking 56 pips (-0.65%) today on high volume. Today's close at 0.008624 marks the lowest recorded closing price since September 27, 2018. Closing below Thursday's low at 0.008669, the FX pair confirmed its breakout through the previous session low after trading up to 71 pips below it intraday.
Daily Candlestick Chart (JPYCHF as at Jul 31, 2020):
Friday's trading range has been 105 pips (1.21%), that's far above the last trading month's daily average range of 57 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 JPYCHF.
One bearish candlestick pattern matches today's price action, the Black Candle.
After having been unable to move above 0.008708 in the prior session, the market ran into sellers again around the same price level today, failing to move higher than 0.008703. The last time this happened on Wednesday, JPYCHF lost -0.21% on the following trading day.
Crossing below the lower Bollinger Band for the first time since July 23rd, 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 0.008739 or signal the beginning of a strong momentum breakout leading to even lower prices.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could accelerate should prices move above the close-by swing high at 0.008748 where further buy stops might get triggered. Trading close to May's high at 0.009200 we could see further upside momentum if potential buy stops at the level get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed below the lower Bollinger Band" stand out. Its common bearish interpretation has been confirmed for JPY/CHF. Out of 132 times, JPYCHF closed lower 63.64% 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 52.27% with an average market move of -0.11%.