Japanese Yen: USD/JPY (JPY=X) increased demand for risk overnight

Japanese Yen: USD/JPY (JPY=X) increased demand for risk overnight

Japanese Yen: USD/JPY (JPY=X) increased demand for risk overnight

The Dollar/Yen is trading higher on Wednesday, rebounding from yesterday’s sell-off. Higher U.S. Treasury yields and increased demand for risk overnight are helping to underpin the Forex pair. The two-day price action suggests investors are squaring positions ahead of today’s release of the minutes of the U.S. Federal Reserve’s monetary policy meeting on July 30-31.

The Fed cut rates by 25 basis points last month, citing “global developments” and “muted inflation.” The Fed minutes are scheduled for release Wednesday at 2 p.m. ET.

Daily Technical Forecast

The USD/JPY is currently trading inside the August 13 wide range for a sixth straight trading session. This indicates investor indecision and impending volatility. The price action is being controlled by Treasury yields and demand for risk. Yields started to firm and stocks hit a short-term bottom on August 15, so the USD/JPY is a little ahead of its indicators.

On the downside is the pivot at 106.013. Trader reaction to this level will likely determine the direction of the USD/JPY on Wednesday.

Technical Indicators

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 107.93.

The projected upper bound is: 107.95.

The projected lower bound is: 105.16.

The projected closing price is: 106.55.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 25 white candles and 23 black candles for a net of 2 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 71.9723. This is not an overbought or oversold reading. The last signal was a buy 10 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 46.78. 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 7 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 120.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. 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 3 period(s) ago.

Rex Takasugi – TD Profile

FOREX JPY= closed down -0.020 at 106.590. Volume was 100% below average (consolidating) and Bollinger Bands were 63% wider than normal.

Open     High      Low     Close     Volume___
106.600 106.620 106.580 106.590 238
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 106.21 107.52 109.93
Volatility: 11 8 7
Volume: 87,380 87,268 94,343

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 3.0% below its 200-period moving average and is in an downward trend. Volatility is high 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 13 periods.

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