USDJPY tumbles -0.61% on high volume
US Dollar/Japanese Yen (USDJPY) Technical Analysis Report for Oct 10, 2018 | by Techniquant Editorial Team
Moving lower for the 5th day in a row, USDJPY ended Wednesday at 112.26 tanking 69 pips (-0.61%) on high volume. This is the biggest single-day loss in over a month. Today's close at 112.26 marks the lowest recorded closing price since September 17th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 112.87, the market confirms its breakout through the previous session's low having traded 62 pips below it intraday. The last time this happened on October 8th, USDJPY lost -0.25% on the following trading day. Ending with a weak close near the low of the day sets a bearish note for the next session.
Daily Candlestick Chart (USDJPY as at Oct 10, 2018):
Wednesday's trading range was 104 pips (0.92%), that's far above last trading month's daily average range of 61 pips. Weekly volatility is also higher, being way above the markets average with the monthly volatility being slightly above average.
Two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern and one bearish pattern, the Black Candle.
Prices are trading close to a key support level at 112.15. Breaking below the key support level at 112.80 today, it is now likely to act as resistance going forward. After having been unable to move above 113.39 in the prior session, USD/JPY ran into sellers again around the same price level today, failing to move higher than 113.29.
Though the Yen is currently in a short-term down trend, this might just be a correction, as the medium and long term trends are both positive. The currency broke below the 20-day moving average at 112.97 today for the first time since September 6th.
Among the 13 market conditions that our engine recognized today, the statistics for the Price Action based condition "5 Consecutive Lower Closes" stands out. While it is usually interpreted being bearish, it has actually shown to be bullish so far in the past for USD/JPY. Out of 35 times during the last ten years, USDJPY closed higher 54.29% of the time on the next trading day. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 74.29% with an average market move of 1.08%.
With three of the other Major FX Pairs closing higher and three closing lower today, the winners of the day are USDCAD surging 0.92% and GBPUSD gaining 0.38%. On the flipside the worst performers have been AUDUSD closing -0.66% lower and NZDUSD losing -0.31%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been GBPZAR surging 1.78% and EURZAR closing 1.65% higher. The worst performers of the day have been ZARJPY tanking -1.94% and CADJPY closing -1.51% lower. Read more