USDJPY dominated by bulls lifting the market higher throughout the day
US Dollar/Japanese Yen (USDJPY) Technical Analysis Report for Sep 10, 2019 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, USDJPY ended Tuesday at 107.54 gaining 30 pips (0.28%). Today's close at 107.54 marks the highest recorded closing price since July 31st. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Monday's high at 107.27, the market confirmed its breakout through the prior session high after trading up to 32 pips above it intraday.
Daily Candlestick Chart (USDJPY as at Sep 10, 2019):
Tuesday's trading range has been 41 pips (0.38%), that's below the last trading month's daily average range of 72 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for USDJPY.
Two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns.
After trading down to 107.18 earlier during the day, the FX pair bounced off the key technical support level at 107.21 (S1). The failure to close below the support could increase that levels importance as support going forward. When prices bounced off a significant support level the last time on August 9th, USDJPY actually lost -0.37% on the following trading day.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day though might signal a potential change in momentum that could lead to a correction back down towards the center of the Bollinger Bands at 106.39.
Although the pair is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Short Candle" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for USD/JPY. Out of 81 times, USDJPY closed lower 51.85% 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 59.26% with an average market move of -0.15%.
With five out of the other six Major FX Pairs closing lower today, the ones that stand out on the negative side are USDCAD losing -0.14% and EURUSD closing -0.04% lower. On the flipside the best performer has been GBPUSD closing 0.11% higher. Looking at the Minor FX Pairs and Crosses, the winners of the day have been ZARJPY surging 1.1% and USDHUF closing 0.48% higher. The worst performers of the day have been EURZAR tanking -0.87% and USDZAR closing -0.83% lower. Read more