USDJPY rockets, gaining 117 pips (1.12%) within a single day on high volume
US Dollar/Japanese Yen (USDJPY) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
USDJPY finished the month -1.88% lower at 105.90 after surging 117 pips (1.12%) today on high volume. This is the biggest single-day gain in over four months. Closing above Thursday's high at 105.30, the FX pair confirmed its breakout through the previous session high after trading up to 76 pips above it intraday.
Daily Candlestick Chart (USDJPY as at Jul 31, 2020):
Friday's trading range has been 187 pips (1.79%), that's far above the last trading month's daily average range of 66 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for USDJPY.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. Despite a weak opening the currency managed to close above the prior day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and could now be heading back up towards the mean of the Bollinger Bands at 106.62. The last time this happened on May 7th, USDJPY gained 0.35% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "White Candle" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for USD/JPY. Out of 604 times, USDJPY closed lower 52.48% of the time on the next trading day after the market condition occurred.
With five out of the other six Major FX Pairs closing lower today, the ones that stand out on the negative side are NZDUSD losing -1.04% and AUDUSD closing -0.72% lower. On the flipside the best performer has been USDCHF closing 0.48% higher. Looking at the Minor FX Pairs and Crosses, the winners of the day have been USDZAR surging 1.87% and GBPZAR closing 1.79% higher. The worst performers of the day have been NZDCAD tanking -1.15% and NZDHKD closing -1.05% lower. Read more