USDJPY breaks below Wednesday's low
US Dollar/Japanese Yen (USDJPY) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, USDJPY ended Thursday at 109.63 losing 158 pips (-1.42%) on low volume. The bears were in full control today, moving the market lower throughout the whole session. Closing below Wednesday's low at 110.75, the FX pair confirmed its breakout through the previous session low after trading up to 154 pips below it intraday.
Daily Candlestick Chart (USDJPY as at Mar 26, 2020):
Thursday's trading range has been 209 pips (1.88%), that's slightly below the last trading month's daily average range of 219 pips. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for USDJPY.
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. The last time a Black Candle showed up on March 16th, USDJPY actually gained 1.73% on the following trading day.
After trading down to 109.21 earlier during the day, the pair bounced off the key technical support level at 109.54 (S1). The failure to close below the support might increase that levels significance as support going forward.
The forex pair shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
With prices trading close to this year's high at 112.23, upside momentum could speed up should USD/JPY be able to break out to new highs for the year.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Hikkake Pattern" stand out. Its common bullish interpretation has been confirmed for USD/JPY. Out of 137 times, USDJPY closed higher 49.64% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after five trading days, showing a win rate of 57.66% with an average market move of 0.07%.
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 2.72% and NZDUSD closing 1.88% higher. On the flipside the worst performers have been USDCHF closing -1.43% lower and USDCAD losing -1.2%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been GBPHKD surging 2.72% and GBPZAR closing 2.65% higher. The worst performers of the day have been USDMXN tanking -4.12% and USDNOK closing -3.12% lower. Read more