USDJPY runs into sellers around 107.86 for the forth day in a row
US Dollar/Japanese Yen (USDJPY) Technical Analysis Report for Jun 01, 2020 | by Techniquant Editorial Team
USDJPY ended Monday at 107.59 losing 23 pips (-0.21%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (USDJPY as at Jun 01, 2020):
Monday's trading range has been 48 pips (0.45%), that's slightly below the last trading month's daily average range of 57 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 107.08 and 107.95 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. In spite of a strong opening the forex pair closed below the prior day's open and close, forming a bearish Engulfing Candle.
Prices are trading close to the key technical support level at 107.35 (S1). USD/JPY closed back below the 50-day moving average at 107.72. The FX pair was sold again around 107.86 after having seen highs at 107.89, 107.91 and 107.95 in the last three trading sessions. Obviously there is something going on at that level. The last time this happened on May 29th, USDJPY lost -0.21% on the following trading day.
Although the currency 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 107.95 where further buy stops might get triggered. Selling could accelerate should prices move below the nearby swing low at 107.08 where further sell stops might get activated. Further buying could move prices higher should the market test May's close-by high at 108.09.
Among the seven 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 19 times, USDJPY closed lower 63.16% 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 seven trading days, showing a win rate of 57.89% with an average market move of -0.01%.
With four out of the other six Major FX Pairs closing higher today, the ones that stand out on the positive side are AUDUSD gaining 1.93% and NZDUSD closing 1.43% higher. On the flipside the worst performers have been USDCAD closing -1.43% lower and USDCHF losing -0.06%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been AUDHKD surging 1.93% and AUDCHF closing 1.9% higher. The worst performers of the day have been EURAUD tanking -1.65% and USDPLN closing -1.36% lower. Read more