JPYTRY runs into sellers around 0.06702 for the third day in a row
Japanese Yen/Turkish Lira (JPYTRY) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
JPYTRY finished the month 3.62% higher at 0.06579 after tanking 101 pips (-1.51%) today on high volume. This is the biggest single-day loss in over a month. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 0.06605, the FX pair confirmed its breakout through the prior session low after trading up to 48 pips below it intraday.
Daily Candlestick Chart (JPYTRY as at Jul 31, 2020):
Friday's trading range has been 145 pips (2.17%), that's far above the last trading month's daily average range of 73 pips. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for JPYTRY.
In spite of a strong opening the pair closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 0.06557 earlier during the day, the forex pair bounced off the key technical support level at 0.06570 (S1). The failure to close below the support might increase that levels importance as support going forward. The market ran into sellers again today around 0.06702 for the third trading day in a row after having found sellers at 0.06711 in the prior session and at 0.06698 two days ago. The last time this happened on July 23rd, JPYTRY actually gained 0.72% on the following trading day.
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 0.06455.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Engulfing Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for JPY/TRY. Out of 142 times, JPYTRY closed higher 54.93% 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 63.38% with an average market move of 0.84%.