USDJPY slips to lowest close since July 30th
US Dollar/Japanese Yen (USDJPY) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, USDJPY finished Wednesday at 104.95 losing 50 pips (-0.47%). Today's close at 104.95 marks the lowest recorded closing price since July 30th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 105.30, the forex pair confirmed its breakout through the prior session low after trading up to 50 pips below it intraday.
Daily Candlestick Chart (USDJPY as at Sep 16, 2020):
Wednesday's trading range has been 66 pips (0.63%), that's slightly above the last trading month's daily average range of 60 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for USDJPY.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 105.10 (now R1), which is likely to act as resistance going forward. The last time this happened on Monday, USDJPY lost -0.26% on the following trading day.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day while could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 105.96.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Trading close to July's low at 104.19 we could see further downside momentum if potential sell stops at the level get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for USD/JPY. Out of 139 times, USDJPY closed higher 52.52% 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 10 trading days, showing a win rate of 64.75% with an average market move of 0.65%.
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 0.61% and NZDUSD closing 0.27% higher. On the flipside the worst performers have been EURUSD closing -0.25% lower and USDCAD losing -0.05%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been GBPPLN surging 0.81% and ZARJPY closing 0.78% higher. The worst performers of the day have been EURZAR tanking -1.42% and CHFZAR closing -1.28% lower. Read more