TRYJPY dominated by bulls lifting the market higher throughout the day
Turkish Lira/Japanese Yen (TRYJPY) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
TRYJPY finished the month -3.49% lower at 15.20 after surging 23 pips (1.54%) today on high volume. This is the biggest single-day gain in over a month. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Thursday's high at 15.14, TRY/JPY confirmed its breakout through the prior session high after trading up to 11 pips above it intraday.
Daily Candlestick Chart (TRYJPY as at Jul 31, 2020):
Friday's trading range has been 33 pips (2.2%), that's far above the last trading month's daily average range of 17 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 TRYJPY.
In spite of a weak opening the pair managed to close above the previous day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
Unable to break through the key technical resistance level at 15.22 (R1), the forex pair closed below it after spiking up to 15.25 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. The currency found buyers again today around 14.92 for the third trading day in a row after having found demand at 14.90 in the prior session and at 14.93 two days ago.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and could now be heading back up towards the mean of the Bollinger Bands at 15.49. The last time this happened on May 7th, TRYJPY gained 0.74% on the following trading day.
The trend is clearly bearish, showing an intact downtrend 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 "Bullish Engulfing Candle" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for TRY/JPY. Out of 114 times, TRYJPY closed lower 56.14% 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 64.91% with an average market move of -0.84%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are NZDUSD losing -1.04% and AUDUSD closing -0.72% lower. On the flipside the best performers have been USDJPY closing 1.12% higher and USDCHF gaining 0.48%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDZAR surging 1.87% and GBPZAR closing 1.79% higher. The worst performers of the day have been NZDCAD tanking -1.15% and NZDHKD closing -1.05% lower. Read more