Japanese Yen: USD/JPY (JPY=X) bullish pattern underway
Bank of America Merrill Lynch discusses USD/JPY technical outlook and flags a bullish pattern underway with a scope of 118.80 on a clear break of 114.45.
“The weekly chart of USD/JPY has broken two thresholds of technical significance. Price action last week closed above the 200wk SMA for the first time in over a year and the weekly RSI is accelerating. Trend following conditions such as MACD and Ichimoku are in a bullish position.
We see resistance at 114.45 and breaking through that opens a higher path to 118.60. Given our view on US rates (broadly bearish and to sell a rally) it may be right to wait for a dip in USD/JPY to position for further upside.
Overall, the bias in prices is: Upwards.
By the way, prices are vulnerable to a correction towards 111.76.
The projected upper bound is: 115.06.
The projected lower bound is: 112.99.
The projected closing price is: 114.03.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 29 white candles and 20 black candles for a net of 9 white candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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 94.2225. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 23 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 72.77. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 53 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 144.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 18 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 buy 27 period(s) ago.
Rex Takasugi – TD Profile
FOREX JPY= closed up 0.060 at 113.970. Volume was 98% below average (consolidating) and Bollinger Bands were 62% wider than normal.
Open High Low Close Volume___
113.910 113.970 113.870 113.970 2,216
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 113.07 111.57 109.76
Volatility: 4 6 8
Volume: 93,333 99,777 105,499
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 3.8% above its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into JPY= (mildly bullish). Our trend forecasting oscillators are currently bullish on JPY= and have had this outlook for the last 17 periods. Our momentum oscillator is currently indicating that JPY= is currently in an overbought condition.