JPYUSD slumps, losing 105 pips (-1.1%) within a single day on high volume
Japanese Yen/US Dollar (JPYUSD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
JPYUSD ended the month 1.92% higher at 0.009443 after tanking 105 pips (-1.1%) today on high volume. This is the biggest single-day loss in over four months. Closing below Thursday's low at 0.009497, the FX pair confirmed its breakout through the previous session low after trading up to 68 pips below it intraday.
Daily Candlestick Chart (JPYUSD as at Jul 31, 2020):
Friday's trading range has been 169 pips (1.77%), that's far above the last trading month's daily average range of 58 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 JPYUSD.
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. Even with a strong opening the currency 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 0.009428 (S1).
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and might now be heading back down towards the mean of the Bollinger Bands at 0.009380. The last time this happened on May 7th, JPYUSD lost -0.35% on the following trading day.
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. Though it is usually interpreted as bearish, it has actually shown to be bullish for JPY/USD. Out of 154 times, JPYUSD closed higher 55.19% 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 seven trading days, showing a win rate of 51.95% with an average market move of 0.00%.