Japanese Yen: USD/JPY (JPY=X) global growth concerns continue to be a major issue

Japanese Yen: USD/JPY (JPY=X) global growth concerns continue to be a major issue

Japanese Yen: USD/JPY (JPY=X) global growth concerns continue to be a major issue

The US dollar has gapped lower against the Japanese yen to kick off the week on Monday, as global growth concerns continue to be a major issue, especially now that the Chinese are starting to close down entire cities. With that being the case, a lot of people are not sure as to how this will affect the global economy, but it certainly can’t be good. With all that being said, the market had been rolling over for several days and it now looks as if we are trying to reach the bottom of the channel that I have painted on the chart. That means a move to the ¥108 level could very well be in the cards. That being said, if the market was to recapture the ¥109.25 level, then you would have to look at it as being extraordinarily bullish.

Keep in mind that the US dollar will be a bit of a “safety currency” as well, so if you are going to buy the Japanese yen over the next couple of days, you will probably get more mileage out of other pairs like the NZD/JPY pair, or the AUD/JPY pair. While this market can fall, there will be a certain amount of US dollar demand due to the chase for safety and the US Treasury markets. In other words, this market may not fall as quickly as some of the other yen related ones. That being said, this is certainly a market that has a lot of downward pressure on it, so with Wall Street opening up very poorly, that could continue to put bearish pressure here as well.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 109.12.

The projected upper bound is: 109.72.

The projected lower bound is: 108.07.

The projected closing price is: 108.89.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 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. The two candles preceding the falling window were black, which makes this pattern even more bearish.

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 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 14.2856. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 4 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 41.28. 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 119 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 -134.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -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 sell 1 period(s) ago.

Rex Takasugi – TD Profile

FOREX JPY= closed down -0.380 at 108.890. Volume was 19% above average (neutral) and Bollinger Bands were 43% wider than normal.

Open     High      Low     Close     Volume___
109.040 109.130 108.720 108.890 98,297
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 109.76 109.18 108.48
Volatility: 3 5 7
Volume: 77,949 76,989 86,665

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= gapped down today (bearish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
FOREX JPY= is currently 0.4% 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 10 periods.

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