JPYGBP closes within previous day's range after lackluster session
Japanese Yen/British Pound (JPYGBP) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, JPYGBP finished Wednesday at 0.007348 losing 10 pips (-0.14%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (JPYGBP as at Sep 16, 2020):
Wednesday's trading range has been 49 pips (0.67%), that's below the last trading month's daily average range of 71 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for JPYGBP. Prices continued to consolidate within a tight trading range between 0.007321 and 0.007384 where it has been caught now for the last three trading days.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Prices are trading close to the key technical resistance level at 0.007392 (R1). The pair was bought again around 0.007328 after having seen lows at 0.007329, 0.007321 and 0.007321 in the last three trading sessions. Obviously there is something going on at that level. The last time this happened on April 15th, JPYGBP gained 0.08% on the following trading day.
While JPY/GBP is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might accelerate should prices move above the nearby swing high at 0.007384 where further buy stops could get activated.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous three Lows" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for JPY/GBP. Out of 28 times, JPYGBP closed lower 57.14% 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 57.14% with an average market move of -0.12%.