USDJPY closes within previous day's range after lackluster session
US Dollar/Japanese Yen (USDJPY) Technical Analysis Report for Feb 08, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, USDJPY finished the week 0.23% higher at 109.75 after losing 7 pips (-0.06%) today. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (USDJPY as at Feb 08, 2019):
Friday's trading range has been 25 pips (0.23%), that's far below the last trading month's daily average range of 57 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for USDJPY. Prices continued to consolidate within a tight trading range between 109.56 and 110.09 where it has been caught now for the last three trading days.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on December 19, 2018, USDJPY lost -1.06% on the following trading day.
Prices are trading close to the key technical resistance level at 110.00 (R1). After having been unable to move lower than 109.61 in the prior session, the Yen found buyers again around the same price level today at 109.65.
Although the market is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might accelerate should prices move above the close-by swing high at 110.09 where further buy stops could get triggered. Selling might speed up should prices move below the nearby swing low at 109.56 where further sell stops could get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous low" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for USD/JPY. Out of 659 times, USDJPY closed lower 54.78% 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 51.14% with an average market move of -0.03%.
With six out of the other six Major FX Pairs closing lower today, the ones that stand out on the negative side are USDCAD losing -0.23% and AUDUSD closing -0.21% lower. None of the markets managed to end the day in the green. Looking at the Minor FX Pairs and Crosses, the winners of the day have been USDTHB surging 0.72% and USDNOK closing 0.5% higher. The worst performers of the day have been EURTRY tanking -0.64% and AUDCHF closing -0.42% lower. Read more