Japanese Yen: USD/JPY (JPY=X) could rise sharply after the Fed announcement
The Dollar/Yen reached its highest level since August 1 last week as investors continued to shed the safe-haven Japanese Yen in reaction to an easing of tensions between the United States and China, an improving U.S. economy and speculation that the Bank of Japan may follow the lead of the European Central Bank and once again cut its benchmark interest rate.
Throughout the summer, the Japanese Yen was driven higher by plunging Treasury yields as speculators increased bets on a U.S. recession due to escalating trade tensions between the United States and China. The selling was strong enough to invert the yields of the 2-year and 10-year Treasury notes, a sign used by many to forecast a future recession.
An easing of tensions between the U.S. and China following the announcement of renewed trade talks has caused investors to rethink the risk of recession. This has encouraged long bond investors to book profits, driving interest rates higher in the process. Higher U.S. rates helped widen the spread between U.S. Government bonds and Japanese Government bonds. This helped make the U.S. Dollar attractive to investors.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 109.11.
The projected lower bound is: 106.19.
The projected closing price is: 107.65.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.
A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend.
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).
An on-neck line occurred. This is a bearish pattern where prices should move lower when the white candlestick’s (i.e., the most recent) low is penetrated.
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 79.1365. This is not an overbought or oversold reading. The last signal was a sell 0 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 57.52. 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 24 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 75. This is not a topping or bottoming area. The last signal was a sell 0 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 20 period(s) ago.
Rex Takasugi – TD Profile
FOREX JPY= closed down -0.400 at 107.670. Volume was 96% below average (consolidating) and Bollinger Bands were 17% wider than normal.
Open High Low Close Volume___
107.650 107.710 107.470 107.670 3,510
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 107.25 107.11 109.39
Volatility: 5 9 7
Volume: 86,175 89,062 92,085
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= gapped down today (bearish) on light volume. Possibility of a Common Gap which usually coincides with a lack of interest in the security. Common Gaps are fairly irrelevent for forecasting purposes. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
FOREX JPY= is currently 1.6% 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 6 periods.