JPYGBP breaks below Thursday's low


Japanese Yen/British Pound (JPYGBP) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team

Highlights

JPYGBP crashes, losing 73 pips (-1.0%) within a single day on high volume
JPYGBP breaks below 200-day moving average for the first time since June 8th
JPYGBP falls to lowest close since June 5th
JPYGBP closes lower for the 4th day in a row
JPYGBP breaks below Thursday's low

Overview

Moving lower for the 4th day in a row, JPYGBP ended the month -3.39% lower at 0.007218 after tanking 73 pips (-1.0%) today on high volume. This is the biggest single-day loss in over a month. Today's close at 0.007218 marks the lowest recorded closing price since June 5th. Closing below Thursday's low at 0.007279, the market confirmed its breakout through the prior session low after trading up to 95 pips below it intraday.

Daily Candlestick Chart (JPYGBP as at Jul 31, 2020):

Daily technical analysis candlestick chart for Japanese Yen/British Pound (JPYGBP) as at Jul 31, 2020

Friday's trading range has been 126 pips (1.73%), that's far above the last trading month's daily average range of 56 pips. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for JPYGBP.

One bearish candlestick pattern matches today's price action, the Black Candle.

The currency closed below the 200-day moving average at 0.007280 for the first time since June 8th. When this moving average was crossed below the last time on June 4th, JPYGBP lost -0.96% on the following trading day.

With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day while might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 0.007377.

The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.

Further selling might move prices lower should the market test June's nearby low at 0.007156.

Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 200" stand out. Its common bearish interpretation has been confirmed for JPY/GBP. Out of 51 times, JPYGBP closed lower 58.82% 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 60.78% with an average market move of -0.57%.


Market Conditions for JPYGBP as at Jul 31, 2020

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