USDJPY pushes through key technical resistance level
US Dollar/Japanese Yen (USDJPY) Technical Analysis Report for Aug 13, 2019 | by Techniquant Editorial Team
USDJPY ended Tuesday at 106.74 surging 144 pips (1.37%) on high volume. This is the biggest single-day gain in over a year. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Monday's high at 105.69, the currency confirmed its breakout through the prior session high after trading up to 129 pips above it intraday.
Daily Candlestick Chart (USDJPY as at Aug 13, 2019):
Tuesday's trading range has been 191 pips (1.81%), that's far above the last trading month's daily average range of 80 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for USDJPY.
Regardless of a weak opening USD/JPY managed to close above the previous day's open and close, forming a bullish Engulfing Candle. The last time this candlestick pattern showed up on July 16th, USDJPY actually lost -0.27% on the following trading day. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
Buyers managed to take out the key technical resistance level at 105.50 (now S1), which is likely to act as support going forward. Prices are trading close to the key technical resistance level at 107.10 (R1). After having been unable to move lower than 105.05 in the prior session, the market found buyers again around the same price level today at 105.07.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might speed up should prices move above the close-by swing high at 107.10 where further buy stops could get activated.
Among the 12 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. Though it is usually interpreted as bullish, it has actually shown to be bearish for USD/JPY. Out of 656 times, USDJPY closed lower 54.57% 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 51.37% with an average market move of -0.06%.
With three of the other Major FX Pairs closing higher and three closing lower today, the winners of the day are USDCHF surging 0.76% and AUDUSD gaining 0.7%. On the flipside the worst performers have been EURUSD closing -0.37% lower and USDCAD losing -0.14%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been ZARJPY surging 2.47% and AUDJPY closing 2.08% higher. The worst performers of the day have been CHFZAR tanking -1.83% and EURZAR closing -1.46% lower. Read more