Japanese Yen: USD/JPY (JPY=X) could find some type of profit-taking

Japanese Yen: USD/JPY (JPY=X) could find some type of profit-taking

Japanese Yen: USD/JPY (JPY=X) could find some type of profit-taking

The US dollar has rallied again during the trading session on Thursday, reaching towards the ¥112 level. We are bit overbought at this point though, so don’t be surprised at all to see this market pullback. If it does, the ¥110 level underneath is what I would consider to be the “floor” at this point. I believe that the market is probably getting a bit tired, and therefore I think a pullback is something that you should look at as an opportunity. As we head into the weekend, it’s likely that we could find some type of profit-taking so this all lines up quite nicely.

Having said all that, the market did continue to break higher, then I think the ¥112.33 level is the next target, and then eventually the ¥114 level. At this point, the market has clearly shown the direction it wants to go, but that doesn’t mean we get there in one shot. Now that we have clear the ¥110 level, the uptrend can continue, and you should know that the ¥110 level was essentially “fair value” for the market longer term. Because of this, the market is likely to see a longer-term move higher, but it’s going to take some time to get there in my estimate. Look at pullbacks as value, and as long as we can stay above the 50 day EMA which is currently at the ¥109.50 level, the uptrend should be intact and should offer plenty of opportunities given enough time. Patience and adding slowly could give you the opportunity to build up a huge position.

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 109.61.

The projected upper bound is: 113.21.

The projected lower bound is: 111.05.

The projected closing price is: 112.13.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 4 black candles. During the past 50 bars, there have been 24 white candles and 24 black candles.

A bearish harami occurred (where the current small black body is contained within an unusually large white body). During an uptrend (which appears to be the case with FOREX JPY=) this pattern implies an end to the rally as the bulls appear to have exhausted themselves.

During a downtrend the bearish harami pattern is bullish as the bulls appear to be gaining strength as the bears weaken.

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 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 93.5393. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 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 75.45. 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 buy 138 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 207.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 6 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 buy 11 period(s) ago.

Rex Takasugi – TD Profile

FOREX JPY= closed down -0.030 at 112.080. Volume was 100% below average (consolidating) and Bollinger Bands were 108% wider than normal.

Open     High      Low     Close     Volume___
112.100 112.100 112.070 112.080 61
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 110.44 109.55 108.40
Volatility: 9 6 7
Volume: 79,214 75,970 86,521

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 3.4% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 10 periods. Our momentum oscillator is currently indicating that JPY= is currently in an overbought condition.

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