Japanese Yen: USD/JPY (JPY=X) Chinese New Year holidays a prevalent distraction for a good part of the week
As noted in our Asia week ahead, a relatively quiet week sets ahead compared to the barrage of events we saw in the previous one. Alongside the thinned market on the back of the Chinese New Year holidays, a more rangebound trend for prices may well be the picture this week as the market continues to await trigger.
US jobs report strength
Leads from Wall Street had leaned towards the positive with earnings and January’s jobs report supporting equities. An evident surprise on the upside of 304K jobs added, compared to the 165K consensus, saw the market taking well to the release. This was despite the disappointment in average hourly earnings at 0.1% month-on-month (MoM) and tick up in unemployment rate back to 4.0%. Over and above the strong payroll addition shown, the strength in the ISM manufacturing reading at 56.6, beating the consensus, served as another data point to reflect the resilience of the US economy. These figures may well dispel some of the worries over growth slowdown in the economy as the slew of items including the latest government shutdown shrouded markets. Still, the wait is for the series of delayed reading including retail sales data and Q4 GDP that had yet to see a planned release date for a check on the health of the economy. Thus, the muted response on Wall Street had ensued the Dow and the S&P 500 indices to keep gains within mild levels.
Early movers in the region including the Nikkei 225 and ASX 200 had commenced on a positive note, both gaining 0.5% when last checked. The rest of the region including the Hang Seng Index and Straits Times Index on half-day operations are expected to see more moderate movements ahead of the holidays. This would nevertheless be gains with the positive US leads and the confirmation of services sector resilience in China following the Caixin services PMI surprise over the weekend. Watch Singapore’s PMI out today, ahead of the set of tier-2 US data, though it would be the State of Union address by President Donald Trump that could capture interest before markets reopen for Singapore on Thursday.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 111.25.
The projected lower bound is: 108.36.
The projected closing price is: 109.81.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 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 67.2289. This is not an overbought or oversold reading. The last signal was a sell 8 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 52.82. 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 21 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 106.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 7 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 14 period(s) ago.
Rex Takasugi – TD Profile
FOREX JPY= closed up 0.400 at 109.880. Volume was 64% below average (consolidating) and Bollinger Bands were 33% narrower than normal.
Open High Low Close Volume___
109.490 109.910 109.420 109.880 39,414
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 109.41 110.71 111.25
Volatility: 5 8 7
Volume: 94,513 103,112 104,817
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 1.2% below its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect volume flowing into and out of JPY= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on JPY= and have had this outlook for the last 5 periods.