Japanese Yen: USD/JPY (JPY=X) breaking to 109.00 will motivate the bears to move the pair to lower levels
The weakening of the US dollar and the renewed global trade and geopolitical tensions were catalysts for the USD/JPY pair to correct lower towards the 108.62 support, its lowest in more than two weeks. And with investor’s averse risk to safe havens, the most important of which is the Japanese yen. The headlines in the beginning of this week’s transactions were dominated by reports of a US missile attack on an Iranian-backed armed groups in Iraq and Syria. US Secretary of State Mike Bombo told reporters that such strikes may be justified, so the recent move in the currency, stock and bond markets could be driven by the prospect of new tensions between the United States and Iran in the Gulf.
On the last trading day of 2019, China National Bureau of Statistics (NBS) announced that China’s Industrial Purchasing Managers Index (PMI) reached a reading of 50.2 in December, unchanged from November. A reading above the 50 level indicates growth, while the reading below reflects contraction. This was the second consecutive month of growth, partly supported by increased supply and demand in addition to increased export orders. Chinese imports and exports are improving in December, with the sub-index of new export orders increasing by 1.5 points to 50.3, its first growth since June 2018. The import sub-index rose 0.1 points per month, on a monthly basis, to 49.9.
The dollar fell near its July lows in a risky currency favorable market, as supply shortages due to Christmas and New Year holidays coupled with new optimism among investors about the future of US-China trade relations seem to have dampened traders’ turnout on the American currency as a safe haven.
According to the technical analysis of the pair: As we expected before, we now confirm that the USD/JPY breaking to 109.00 will motivate the bears to move the pair to lower levels, which is what happened now from the current level of 108.60. The pair enters into good buying areas. The same applies if it falls to 108.10 levels and 107.65, respectively. On the upside, there will be no strength for the upward trend without moving towards 110.00 psychological resistance. Renewed trade and political tensions around the world will continue to spur further gains for the Japanese yen.
After the Chinese data will be released, the focus will be on announcing the US Consumer Confidence Index data. Japanese markets will be on vacation until January 7, 2020.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 108.74.
The projected upper bound is: 109.49.
The projected lower bound is: 107.83.
The projected closing price is: 108.66.
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 24 white candles and 25 black candles for a net of 1 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 13.9056. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 9 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 41.63. 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 101 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 -191.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 22 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 2 period(s) ago.
Rex Takasugi – TD Profile
FOREX JPY= closed up 0.050 at 108.660. Volume was 99% below average (consolidating) and Bollinger Bands were 18% narrower than normal.
Open High Low Close Volume___
108.610 108.750 108.590 108.660 601
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 109.21 108.95 108.68
Volatility: 4 5 6
Volume: 56,306 78,330 87,352
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 0.0% below its 200-period moving average and is in an downward trend. Volatility is low as compared to the average volatility over the last 10 periods. 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 0 periods.