Japanese Yen: USD/JPY (JPY=X) increased demand for risk
The Dollar/Yen is trading higher on Thursday, reversing yesterday’s weakness. Increased demand for risk is helping to dampen the Japanese Yen’s appeal as a safe-haven asset and rising U.S. Treasury yields are making the U.S. Dollar a more attractive investment. The move are being fueled by positive developments over Brexit and solid U.S. economic data.
Demand for risk could continue to increase on Thursday if the positive developments continue over Brexit. The next step for lawmakers will be to seek an extension to Article 50, which oversees the withdrawal process from the EU, and thus extends the departure date beyond the March 29 deadline. Members will vote on this issue on Thursday evening. After hearing arguments from U.K. politicians on why they are requesting the delay, European Union officials could accept or reject this proposal. This decision should also be another source of heightened volatility for investors.
In other news, investors will get the opportunity to react to the latest U.S. data on Import Prices, Weekly Unemployment Claims and New Home Sales.
Early Friday, the Bank of Japan is widely expected to leave its benchmark interest rate unchanged. Reuters is also reporting that it is considering a slight downgrade to its assessment of the economy in its monthly report for March as exports and factory output fell due to slowing demand from China.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 110.79.
The projected upper bound is: 112.64.
The projected lower bound is: 110.70.
The projected closing price is: 111.67.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 30 white candles and 18 black candles for a net of 12 white candles.
An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend. It then signifies that the momentum may be shifting from the bears to the bulls.
If the engulfing bullish pattern occurs during an uptrend (which appears to be the case with FOREX JPY=), it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.
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 55.7994. This is not an overbought or oversold reading. The last signal was a sell 5 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 59.18. 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 49 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 29. This is not a topping or bottoming area. The last signal was a sell 5 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 sell 3 period(s) ago.
Rex Takasugi – TD Profile
FOREX JPY= closed up 0.440 at 111.590. Volume was 34% below average (neutral) and Bollinger Bands were 36% narrower than normal.
Open High Low Close Volume___
111.140 111.730 111.130 111.590 67,161
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 111.53 110.09 111.42
Volatility: 5 6 7
Volume: 88,160 95,576 104,202
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 0.2% above its 200-period moving average and is in an upward trend. Volatility is low 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 33 periods.