JPYEUR pushes through Thursday's high
Japanese Yen/Euro (JPYEUR) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, JPYEUR finished the week -1.25% lower at 0.008522 after gaining 36 pips (0.42%) today. Closing above Thursday's high at 0.008494, the pair confirmed its breakout through the prior session high after trading up to 53 pips above it intraday.
Daily Candlestick Chart (JPYEUR as at May 22, 2020):
Friday's trading range has been 71 pips (0.84%), that's slightly above the last trading month's daily average range of 70 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 JPYEUR.
The market managed to close back above the 50-day moving average at 0.008517. Unable to break through the key technical resistance level at 0.008531 (R1), the FX pair closed below it after spiking up to 0.008547 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. When prices bounced off a significant resistance level the last time on May 15th, JPYEUR lost -1.08% on the following trading day.
Although the currency is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Further selling might move prices lower should the market test April's nearby low at 0.008399.
Among the four 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. Though it is usually interpreted as bullish, it has actually shown to be bearish for JPY/EUR. Out of 82 times, JPYEUR closed lower 54.88% 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 51.22% with an average market move of -0.11%.