USDJPY closes within previous day's range after lackluster session
US Dollar/Japanese Yen (USDJPY) Technical Analysis Report for Mar 25, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, USDJPY ended Wednesday at 111.21 edging lower 1 pip (-0.01%) on low volume. Trading 46 pips higher after the open, USD/JPY was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on February 14th, USDJPY actually gained 0.09% on the following trading day. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (USDJPY as at Mar 25, 2020):
Wednesday's trading range has been 93 pips (0.84%), that's far below the last trading month's daily average range of 213 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for USDJPY. Prices continued to consolidate within a tight trading range between 109.67 and 111.72 where it has been caught now for the last three trading days.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Northern Doji which is known as bearish pattern and one neutral pattern, the Doji.
Prices are trading close to the key technical resistance level at 111.72 (R1). The market was sold again around 111.68 after having seen highs at 111.72, 111.60 and 111.51 in the last three trading sessions. Obviously there is something going on at that level.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the nearby swing high at 111.72 where further buy stops could get triggered. With prices trading close to this year's high at 112.23, upside momentum might speed up should the Yen be able to break out to new highs for the year.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous three Highs" stand out. Its common bearish interpretation has been confirmed for USD/JPY. Out of 17 times, USDJPY closed lower 58.82% 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 six trading days, showing a win rate of 52.94% with an average market move of 0.04%.
With four out of the other six Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 1.01% and EURUSD closing 0.86% higher. On the flipside the worst performers have been USDCAD closing -1.88% lower and USDCHF losing -0.45%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been CADSGD surging 2.0% and CADHKD closing 1.91% higher. The worst performers of the day have been USDMXN tanking -3.67% and USDNOK closing -3.18% lower. Read more