Japanese Yen: USD/JPY (JPY=X) continue to expect volatility and the possibility of a two-sided trade

Japanese Yen: USD/JPY (JPY=X) continue to expect volatility and the possibility of a two-sided trade

Japanese Yen: USD/JPY (JPY=X) continue to expect volatility and the possibility of a two-sided trade

The Dollar/Yen is trading slightly lower on Thursday after clawing back most of its earlier losses. The early volatility is being fueled by headlines over U.S.-China trade relations. The negative headlines driving the Forex pair lower are saying a potential trade deal is being threatened by a number of issues between the two economic powerhouses. A positive comment from a Chinese official has temporarily stopped the selling, while triggering an intraday short-covering rally.

The Negatives

Buyers flocked to the safe-haven Japanese Yen earlier in the session on expectations that a U.S.-China “phase one” trade agreement will be delayed.

Investor sentiment was also rattled after U.S. President Donald Trump said he did not think Beijing was stepping up to the level that he wanted in the trade talks. Additionally, people close to the White House and trade experts have said the deal could be pushed back until next year as Beijing presses for more extensive tariff rollbacks and Washington ramps up its own demands.

Concerns over a potential impasse were also ramped up on Wednesday when the U.S House of Representatives passed two bills to back protesters in Hong Kong, with Trump expected to sign them into law despite China’s objection. Some experts claim this could be a deal breaker because China will interpret the move as an interference into its domestic affairs and is likely to think it will no longer need to make concessions on trade.

The Positives

After an early setback, the USD/JPY began to pare losses after China’s top negotiator reportedly expressed optimism in sealing a deal.

Bloomberg reported mid-morning that Chinese Vice Premier Liu He said he was “cautiously optimistic” in reaching a “phase one” deal, but added that he was “confused” about U.S. demands.

Daily Forecast

Some traders are calling the negative headlines “noise”, further saying that traders are basically following the news on the trade war, and having a hard time predicting when we will have good news or bad news. This creates uncertainty and investors tend to leave risky assets when there is uncertainty and seek protection in the safe-haven Japanese Yen.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 109.53.

The projected lower bound is: 107.69.

The projected closing price is: 108.61.

Candlesticks

During the past 10 bars, there have been 2 white candles and 6 black candles for a net of 4 black candles. During the past 50 bars, there have been 25 white candles and 23 black candles for a net of 2 white candles.

A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 39.5255. 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 50.49. 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 72 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 -82. This is not a topping or bottoming area. The last signal was a sell 8 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 6 period(s) ago.

Rex Takasugi – TD Profile

FOREX JPY= closed unchanged at 108.600. Volume was 3% above average (neutral) and Bollinger Bands were 47% narrower than normal.

Open     High      Low     Close     Volume___
108.600 108.690 108.270 108.600 94,270
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 108.76 108.28 108.96
Volatility: 3 5 7
Volume: 87,299 90,050 90,396

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.

Summary

FOREX JPY= is currently 0.3% below its 200-period moving average and is in an upward trend. Volatility is relatively normal 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 bullish on JPY= and have had this outlook for the last 29 periods.

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