Japanese Yen: USD/JPY (JPY=X) Fewer concerns but also a potential change of policy by the BOJ

Japanese Yen: USD/JPY (JPY=X) Fewer concerns but also a potential change of policy by the BOJ

Japanese Yen: USD/JPY (JPY=X) Fewer concerns but also a potential change of policy by the BOJ

The deadline came and went and the US did not impose new tariffs on China. On one hand, Trump threatened to add additional ones. On the other hand, Treasury Secretary Steven Mnuchin initiated talks with China. Does he have the backing of Trump? Probably not, but Trump is busy with Florence, the hurricane pounding the Eastern seaboard.

Emerging markets are also calmer with Turkey finally raising rates and no new adverse developments in other countries. Argentina continues negotiating with the IMF.

The Federal Reserve remains hawkish with both Brainard and Evans hinting that interest rates may go beyond neutral, aka higher than inflation. Inflation actually dropped: Core CPI fell from 2.4% to 2.2%, temporarily weighing on the greenback. Retail sales were mixed with a miss on the headline but with substantial upward revisions. Consumer confidence beat expectations with 100.8 points.

Japanese Prime Minister Shinzo Abe, preparing for an internal leadership contest within his party, said that loose monetary policy will not last forever. Is the BOJ about to tighten? Not so fast, but the yen may react positively.

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 110.84.

The projected upper bound is: 113.27.

The projected lower bound is: 110.86.

The projected closing price is: 112.06.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 25 white candles and 24 black candles for a net of 1 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 92.3644. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 12 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 59.58. 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 sell 42 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 147.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 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 16 period(s) ago.

Rex Takasugi – TD Profile

FOREX JPY= closed unchanged at 112.040. Volume was 100% below average (consolidating) and Bollinger Bands were 22% narrower than normal.

Open High Low Close Volume___
111.940 112.050 111.920 112.040 172

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

Moving Averages: 10-period 50-period 200-period
Close: 111.47 111.35 109.76
Volatility: 7 7 8
Volume: 81,518 100,994 104,810

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 2.1% 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 6 periods.

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