JPYUSD closes below its opening price unable to hold early session gains
Japanese Yen/US Dollar (JPYUSD) Technical Analysis Report for May 29, 2020 | by Techniquant Editorial Team
JPYUSD ended the month -0.57% lower at 0.009275 after losing 15 pips (-0.16%) today on high volume. Today's close at 0.009275 marks the lowest recorded closing price since April 16th. Trading 50 pips higher after the open, the currency was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (JPYUSD as at May 29, 2020):
Friday's trading range has been 70 pips (0.75%), that's far above the last trading month's daily average range of 50 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for JPYUSD.
After spiking up to 0.009339 during the day, JPY/USD has been sold off at those price levels and formed a bearish Pin Bar closing 64 pips below today's high. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Hikkake Pattern.
The market closed below the 50-day moving average at 0.009278 for the first time since May 11th. The forex pair was bought again around 0.009269 after having seen lows at 0.009267, 0.009264 and 0.009266 in the last three trading sessions. Obviously there is something going on at that level. The last time this happened on March 25th, JPYUSD gained 1.45% on the following trading day.
Though the FX pair is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might accelerate should prices move below the close-by swing low at 0.009264 where further sell stops could get activated. As prices are trading close to May's low at 0.009252, downside momentum might speed up should the pair mark new lows for the month.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Pin Bar" stand out. Its common bearish interpretation has been confirmed for JPY/USD. Out of 7 times, JPYUSD closed lower 71.43% 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 71.43% with an average market move of -2.09%.