USDJPY closes below its opening price unable to hold early session gains
US Dollar/Japanese Yen (USDJPY) Technical Analysis Report for Aug 04, 2020 | by Techniquant Editorial Team
USDJPY finished Tuesday at 105.72 losing 23 pips (-0.22%). Trading 22 pips higher after the open, the forex pair was unable to hold its gains as the bears took control ending the day below its opening price. 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 Aug 04, 2020):
Tuesday's trading range has been 56 pips (0.53%), that's slightly below the last trading month's daily average range of 68 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for USDJPY.
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. Despite a strong opening the currency closed below the prior day's open and close, forming a bearish Engulfing Candle.
After having been unable to move lower than 105.58 in the previous session, the pair found buyers again around the same price level today at 105.64. The last time this happened on July 30th, USDJPY gained 1.12% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. Its common bearish interpretation has been confirmed for USD/JPY. Out of 375 times, USDJPY closed lower 51.20% 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 10 trading days, showing a win rate of 53.07% with an average market move of -0.03%.
With three of the other Major FX Pairs closing higher and three closing lower today, the winners of the day are AUDUSD surging 0.53% and EURUSD gaining 0.35%. On the flipside the worst performers have been USDCAD closing -0.55% lower and USDCHF losing -0.49%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been CHFZAR surging 1.54% and EURZAR closing 1.39% higher. The worst performers of the day have been ZARJPY tanking -1.14% and USDCZK closing -0.92% lower. Read more