USDJPY closes higher for the 2nd day in a row
US Dollar/Japanese Yen (USDJPY) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, USDJPY ended the week 0.53% higher at 107.64 after edging higher 3 pips (0.03%) today on low volume. Trading up to 30 pips lower after the open, the pair managed to reverse during the session as bulls took control ending the day above its opening price. 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 May 22, 2020):
Friday's trading range has been 44 pips (0.41%), that's below the last trading month's daily average range of 64 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for USDJPY. Prices continued to consolidate within a tight trading range between 107.32 and 107.98 where it has been caught now for the last three trading days.
Three candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern, one bearish pattern, the Northern Doji and one neutral pattern, the Doji. The last time a Doji showed up on March 25th, USDJPY lost -1.42% on the following trading day.
After trading down to 107.32 earlier during the day, the Yen bounced off the key technical support level at 107.35 (S1). The failure to close below the support could increase that levels significance as support going forward.
Though the market is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could speed up should prices move above the close-by swing high at 108.09 where further buy stops might get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bullish Intraday Reversal" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for USD/JPY. Out of 425 times, USDJPY closed lower 52.71% 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 two trading days, showing a win rate of 52.24% with an average market move of -0.01%.
With four out of the other six Major FX Pairs closing lower today, the ones that stand out on the negative side are GBPUSD losing -0.47% and EURUSD closing -0.44% lower. On the flipside the best performers have been USDCAD closing 0.33% higher and USDCHF gaining 0.08%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been USDCZK surging 1.09% and USDHUF closing 0.9% higher. The worst performers of the day have been USDMXN tanking -0.58% and SGDHKD closing -0.51% lower. Read more