USDJPY finds buyers again around 104.55
US Dollar/Japanese Yen (USDJPY) Technical Analysis Report for Oct 23, 2020 | by Techniquant Editorial Team
USDJPY finished the week -0.66% lower at 104.71 after losing 13 pips (-0.12%) today on low volume. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (USDJPY as at Oct 23, 2020):
Friday's trading range has been 39 pips (0.37%), that's slightly below the last trading month's daily average range of 45 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 slightly lower than usual for USDJPY.
One bearish candlestick pattern matches today's price action, the Bearish Hikkake Pattern.
Prices are trading close to the key technical support level at 104.34 (S1). After having been unable to move lower than 104.48 in the previous session, the forex pair found buyers again around the same price level today at 104.55. The last time this happened on Tuesday, USDJPY actually lost -0.86% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling might accelerate should prices move below the close-by swing low at 104.34 where further sell stops could get activated. Further selling might move prices lower should the market test September's nearby low at 104.00.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Hikkake Pattern" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for USD/JPY. Out of 155 times, USDJPY closed higher 53.55% 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 55.48% with an average market move of 0.25%.
With three of the other Major FX Pairs closing higher and three closing lower today, the winners of the day are EURUSD surging 0.36% and AUDUSD gaining 0.31%. On the flipside the worst performers have been GBPUSD closing -0.33% lower and USDCHF losing -0.31%. Looking at the Minor FX Pairs and Crosses, the winners of the day have been EURGBP surging 0.71% and EURSGD closing 0.47% higher. The worst performers of the day have been GBPPLN tanking -0.81% and GBPCHF closing -0.65% lower. Read more