Japanese Yen: USD/JPY (JPY=X) disappointing data weigh on the greenback

Japanese Yen: USD/JPY (JPY=X) disappointing data weigh on the greenback

Japanese Yen: USD/JPY (JPY=X) disappointing data weigh on the greenback

For the second straight day on Wednesday, the USD/JPY pair struggled to make a decisive move in either direction and spent the second half of the day in a very tight range a little below the 111.50 mark. As of writing, the pair was up 0.13% on the day at 111.45. 

After rising more than 2.5% on Monday, the 10-year US T-bond yield staged a technical correction on Tuesday and turned north, once again, to gain around 1.5% on the day. Although the USD/JPY pair usually is tightly correlated with the 10-year T-bond yields, the broad-based selling pressure surrounding the greenback didn’t allow the pair to climb higher. Moreover, following a positive start to the day, major equity indexes in the U.S. retraced a large portion of their early gains to help the JPY stay resilient against its rivals.

Today’s data from the U.S. showed that the economic activity in the service sector expanded at a slower pace than expected in March with the ISM’s and Markit’s PMI figures falling short of analysts’ forecasts. “The non-manufacturing sector’s growth cooled off in March after strong growth in February. Respondents remain mostly optimistic about overall business conditions and the economy. They still have underlying concerns about employment resources and capacity constraints,” the ISM noted in its publication.

Additionally, the ADP announced that employment in the private sector increased by 129,000 in March to miss the market estimate of 170K. The US Dollar Index, which advanced to its highest level since early March near mid-97s yesterday, was last down 0.25% on the day at 97.08.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 112.51.

The projected lower bound is: 110.51.

The projected closing price is: 111.51.

Candlesticks

During the past 10 bars, there have been 6 white candles and 3 black candles for a net of 3 white candles. During the past 50 bars, there have been 26 white candles and 21 black candles for a net of 5 white candles.

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 91.6050. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 7 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 57.81. 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 64 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 91. This is not a topping or bottoming area. The last signal was a buy 7 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 2 period(s) ago.

Rex Takasugi – TD Profile

FOREX JPY= closed unchanged at 111.470. Volume was 97% below average (consolidating) and Bollinger Bands were 30% narrower than normal.

Open High Low Close Volume___
111.470 111.500 111.420 111.470 2,717

Technical Outlook
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 110.80 110.69 111.47
Volatility: 7 6 7
Volume: 90,906 93,284 103,674

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 0.0% below 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 9 periods.

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