JPYHKD tanks, losing 81 pips (-1.09%) within a single day on high volume
Japanese Yen/Hong Kong Dollar (JPYHKD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
JPYHKD ended the month 1.98% higher at 0.07321 after tanking 81 pips (-1.09%) today on high volume. This is the biggest single-day loss in over four months. Closing below Thursday's low at 0.07358, JPY/HKD confirmed its breakout through the previous session low after trading up to 48 pips below it intraday.
Daily Candlestick Chart (JPYHKD as at Jul 31, 2020):
Friday's trading range has been 130 pips (1.76%), that's far above the last trading month's daily average range of 46 pips. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for JPYHKD.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. The last time this happened on April 15th, JPYHKD lost -0.43% on the following trading day. Notwithstanding a strong opening the market closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 0.07305 (S1).
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 0.07271.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed below the upper Bollinger Band" stand out. Its common bearish interpretation has been confirmed for JPY/HKD. Out of 69 times, JPYHKD closed lower 49.28% 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 59.42% with an average market move of -0.46%.