JPYEUR closes above its opening price after recovering from early selling pressure
Japanese Yen/Euro (JPYEUR) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, JPYEUR finished the week 1.03% higher at 0.008410 after gaining 10 pips (0.12%) today on low volume. Today's close at 0.008410 marks the highest recorded closing price since October 10, 2019. Trading up to 21 pips lower after the open, JPY/EUR managed to reverse during the session as bulls took control ending the day above its opening price. 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 (JPYEUR as at Feb 14, 2020):
Friday's trading range has been 33 pips (0.39%), that's below the last trading month's daily average range of 42 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for JPYEUR.
After trading down to 0.008380 earlier during the day, the pair bounced off the key technical support level at 0.008386 (S1). The failure to close below the support might increase that levels importance as support going forward. After having been unable to move above 0.008412 in the prior session, the market ran into sellers again around the same price level today, failing to move higher than 0.008413. The last time this happened on Wednesday, JPYEUR actually gained 0.56% on the following trading day.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Higher Closes" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for JPY/EUR. Out of 157 times, JPYEUR closed lower 53.50% 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 52.87% with an average market move of -0.10%.