JPYTRY stuck within tight trading range
Japanese Yen/Turkish Lira (JPYTRY) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
JPYTRY ended the week -1.83% lower at 0.06329 after gaining 16 pips (0.25%) today on low volume. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (JPYTRY as at May 22, 2020):
Friday's trading range has been 52 pips (0.82%), that's below the last trading month's daily average range of 89 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for JPYTRY. Prices continued to consolidate within a tight trading range between 0.06274 and 0.06349 where it has been caught now for the last three trading days.
In spite of a weak opening JPY/TRY managed to close above the previous day's open and close, forming a bullish Engulfing Candle. The last time this candlestick pattern showed up on March 26th, JPYTRY gained 2.50% on the following trading day. Additionally, two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Bearish Hikkake Pattern.
Prices are trading close to the key technical support level at 0.06285 (S1). After having been unable to move lower than 0.06293 in the prior session, the market found buyers again around the same price level today at 0.06297.
Although the pair is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could accelerate should prices move below the nearby swing low at 0.06262 where further sell stops might get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Hikkake Pattern" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for JPY/TRY. Out of 102 times, JPYTRY closed higher 50.98% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 64.71% with an average market move of 1.31%.