JPYCHF breaks above 50-day moving average for the first time since May 25th
Japanese Yen/Swiss Franc (JPYCHF) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, JPYCHF ended Wednesday at 0.008666 surging 53 pips (0.62%). This is the biggest single-day gain in over a month. Today's close at 0.008666 marks the highest recorded closing price since July 30th. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Tuesday's high at 0.008621, JPY/CHF confirmed its breakout through the previous session high after trading up to 54 pips above it intraday.
Daily Candlestick Chart (JPYCHF as at Sep 16, 2020):
Wednesday's trading range has been 68 pips (0.79%), that's slightly above the last trading month's daily average range of 65 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for JPYCHF.
One bullish candlestick pattern matches today's price action, the White Candle.
The currency managed to close above the 50-day moving average at 0.008639 for the first time since May 25th.
Crossing above the upper Bollinger Band for the first time since September 8th, prices have shown unusually strong upward momentum in the short-term. This might either indicate a potential buying climax after which prices could head back down towards the mean of the Bollinger Bands at 0.008587 or signal the beginning of a strong momentum breakout leading to even higher prices. The last time prices broke out above the upper Bollinger Band on September 8th, JPYCHF actually lost -0.74% on the following trading day.
Though the FX pair is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could accelerate should prices move above the close-by swing high at 0.008684 where further buy stops might get activated. Selling could speed up should prices move below the nearby swing low at 0.008524 where further sell stops might get triggered. With prices trading close to this year's low at 0.008482, downside momentum could accelerate should the market break out to new lows for the year. Trading close to July's high at 0.008848 we might see further upside momentum if potential buy stops at the level get activated. As prices are trading close to September's low at 0.008511, downside momentum could speed up should the forex pair mark new lows for the month.
Among the 14 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Break through SMA 50" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for JPY/CHF. Out of 84 times, JPYCHF closed lower 60.71% 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 55.95% with an average market move of -0.31%.