Japanese Yen: USD/JPY (JPY=X) Failing to Hold Gains
The US dollar tried to rally during the trading session on Wednesday but gave back quite a bit of the gains in order to form a less than impressive candlestick. That being the case, if we break down below the bottom of the candlestick for the Wednesday session it will complete the negativity that we had seen on Tuesday. This isn’t a selling signal from what I see, rather it is a sign that the market needs to pullback as it had gotten a bit overextended, something that I had thought anyway.
I believe that there is plenty of support down at the ¥109.50 level, and that of course the ¥109 level. This is a market that is very sensitive to risk appetite so keep in mind that stock markets can and will move somewhat in tandem when it comes to this market. Going forward, the market is likely to find plenty of buyers in both the USD/JPY pair, but also the S&P 500 which tends to have a reasonable amount of correlation between the stock market and this pair. You can also see that the most recent move was rather explosive to the upside, so it’s very likely that if we can pull back from here, it will find plenty of buyers underneath.
Furthermore, the 50 day EMA underneath should offer plenty of support, so be willing to take advantage of a bounce in that general vicinity. If we can find some type of bounce between here and there, it would be a very bullish sign that momentum is ready to continue picking up and go to the upside. I recognize that this pair is going to continue to have a lot of resistance above, but I think that we will eventually make our way to the ¥111 level, as it is where we see a gap, and then I believe after that we could go to the ¥112.33 level, which is the 100% Fibonacci retracement level. Ultimately, I think that we go much higher but it’s probably going to be a very noisy affair on the way up, and at this point I have no interest in shorting this market because it has been so resilient as of late, and of course we have seen the Japanese yen lose quite a bit against other currencies simultaneously. With this, I am bullish but I’m looking to find support underneath before putting money to work.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 109.13.
The projected upper bound is: 110.31.
The projected lower bound is: 108.69.
The projected closing price is: 109.50.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
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 20.0960. This is not an overbought or oversold reading. The last signal was a sell 2 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 50.84. 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 117 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 -1. This is not a topping or bottoming area. The last signal was a sell 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 9 period(s) ago.
Rex Takasugi – TD Profile
FOREX JPY= closed down -0.350 at 109.480. Volume was 14% below average (neutral) and Bollinger Bands were 42% wider than normal.
Open High Low Close Volume___
109.830 109.860 109.250 109.480 70,797
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 109.89 109.16 108.51
Volatility: 4 5 7
Volume: 73,249 76,802 86,620
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 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 8 periods.