Japanese Yen: USD/JPY (JPY=X) Bearish Momentum Still Stronger
Amid renewed global geopolitical tensions, particularly from North Korea and the Middle East region, it was natural to have a strong demand for safe havens, the most important of which is the Japanese Yen, and accordingly, the USD/JPY price declined for six consecutive trading sessions, reaching the 107.86 support in the beginning of this week’s trading. The US dollar experienced a sharp decline in the last days of 2019, as investors welcomed the US claims that the “first phase” of the trade agreement with China will be signed in the middle of this month. The demand for the dollar returned again, as tensions with Iran increased.
US President Donald Trump said on New Year’s Eve that he would sign the first-stage trade agreement with China at the White House on January 15, 2020 before a visit to Beijing shortly after to start negotiations of the second phase, which would be more ambitious than the first. The deal will see a reduction in some customs duties imposed on exports from both sides in the past year, and will prevent further hostilities as long as conditions are met and talks continue between the two sides.
This announcement is supportive to the turbulent global economy and encouraged investors to take risks despite the positive mood being increasingly undermined by tensions between the United States and Iran, which increased after the White House claimed responsibility for a missile attack on an Iranian-backed armed group in Iraq that led to protests outside the US embassy in Baghdad, and culminated after the killing of the Iranian general Qassem Soleimani with an American air strike.
Concern increased after Trump’s recent tweet that the United States has identified 52 locations inside Iran that would be attacked if Iran targets any of its bases or employees elsewhere. This situation will continue to support more gains for the Japanese yen as one of the most important safe havens.
According to the technical analysis of the pair: The USD/JPY pair will have no real opportunity to reverse the current situation without moving towards the 110.00 psychological resistance. On the other hand, the general trend will remain bearish, as is the situation now, as long as it remains stable around and below the 108.00 support. The closest support levels for the pair are currently at 107.70, 106.90 and 106.00, respectively. The pair’s losses may subside with the formal signing of the US-China trade agreement and the calming of fears of an escalation toward war in the Middle East region.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 109.25.
The projected lower bound is: 107.53.
The projected closing price is: 108.39.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 23 white candles and 26 black candles for a net of 3 black candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 30.1888. This is not an overbought or oversold reading. The last signal was a buy 1 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 40.61. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 104 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -129.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 25 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 5 period(s) ago.
Rex Takasugi – TD Profile
FOREX JPY= closed up 0.320 at 108.400. Volume was 2% below average (neutral) and Bollinger Bands were 5% narrower than normal.
Open High Low Close Volume___
107.990 108.500 107.750 108.400 82,613
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 108.90 108.93 108.64
Volatility: 5 5 6
Volume: 59,427 77,889 86,961
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FOREX JPY= is currently 0.2% below its 200-period moving average and is in an downward trend. Volatility is Our volume indicators reflect volume flowing into and out of JPY= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on JPY= and have had this outlook for the last 3 periods.
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