Japanese Yen: USD/JPY (JPY=X) Could Break Sharply if Sellers Take Out 109.361
The Dollar/Yen finished lower on Friday after hitting its highest level since December 13. The price action indicates that buyers are still hesitating just slightly below the May 30 top at 109.930.
The greenback fell from a four-week high against the safe-haven Japanese Yen on Friday as investors worried over possible renewed geopolitical tensions between the United States and Iran. The renewed concerns stemmed from reports that the United States imposed more sanctions on Iran and are threatening additional sanctions.
The U.S. Dollar was also on the defensive after the release of a disappointing U.S. Non-Farm Payrolls report. The headline number came in soft, and Average Hourly Earnings were up only 0.1% versus a 0.3% estimate.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. However, momentum has been trending higher since the formation of the closing price reversal bottom on January 8 and its subsequent confirmation.
The main trend will change to up on a move through 109.706, followed by additional main tops at 109.728 and 109.930. I’m convinced that buyers will actually have to take out 109.930 to really trigger a breakout to the upside. A move through 107.651 will signal a resumption of the downtrend.
The main range is last year’s trading range of 112.405 to 104.463. Its retracement zone at 108.421 to 109.361 is controlling the longer-term direction of the USD/JPY. Trading on the strong side of this zone is helping to give the Dollar/Yen a slight upside bias.
Daily Gann Angle Technical Analysis
Based on Friday’s price action, the key Gann angle to watch is the angle from the 112.405 main top, moving down at a rate of 0.015625 per day since April 24, 2019.
On Friday, the USD/JPY closed at 109.508, just slightly below the angle at 109.514. This may be an indication that the selling is greater than the buying at current price levels.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 110.39.
The projected lower bound is: 108.71.
The projected closing price is: 109.55.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 25 white candles and 24 black candles for a net of 1 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.
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 92.5742. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 6 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 58.85. 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 109 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 buy 4 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 1 period(s) ago.
Rex Takasugi – TD Profile
FOREX JPY= closed up 0.070 at 109.530. Volume was 99% below average (consolidating) and Bollinger Bands were 2% narrower than normal.
Open High Low Close Volume___
109.480 109.540 109.440 109.530 849
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 108.84 109.00 108.58
Volatility: 6 5 7
Volume: 66,934 77,663 86,606
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 0.9% above its 200-period moving average and is in an downward 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 bearish on JPY= and have had this outlook for the last 8 periods.