Japanese Yen: USD/JPY (JPY=X) Increased Risk Appetite

Japanese Yen: USD/JPY (JPY=X) Increased Risk Appetite

Japanese Yen: USD/JPY (JPY=X) Increased Risk Appetite

The Dollar/Yen rose last week on the back of higher Treasury yields and increased appetite for risky assets. Traders were reacting to optimism over progress in U.S-China trade talks. The catalysts behind the rising Treasury yields were reports that the two economic powerhouses were considering offering concessions to speed up the process of reaching a deal to end the on-going trade dispute. Rising yields helped make the U.S. Dollar a more attractive asset. Increased appetite for risk drove stocks higher, reducing demand for the safe-haven Japanese Yen.

Hopes of an End to Trade Dispute

Fueling the reactions in the markets was a report from CNBC that China had offered a six-year increase in U.S. imports during recent trade talks. Bloomberg News also reported on Friday that the deal would aim to reduce the annual U.S. trade deficit to zero by 2024.

On Thursday, it was reported that Treasury Secretary Steven Mnuchin was considering the idea of easing tariffs on Chinese goods as a means of moving along the negotiations for a new trade deal. The reaction to this news was cautious, however, because the report was refuted by a senior administration official who told CNBC that there is “no discussion of lifting tariffs now.”

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 110.87.

The projected upper bound is: 111.10.

The projected lower bound is: 108.16.

The projected closing price is: 109.63.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 91.1593. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 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 48.17. 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 11 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 150.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 10 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 4 period(s) ago.

Rex Takasugi – TD Profile

FOREX JPY= closed down -0.050 at 109.710. Volume was 98% below average (consolidating) and Bollinger Bands were 23% wider than normal.

Open High Low Close Volume___
109.740 109.760 109.620 109.710 1,987

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

Moving Averages: 10-period 50-period 200-period
Close: 108.85 111.46 111.20
Volatility: 6 8 7
Volume: 92,982 106,941 104,840

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 1.3% 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 31 periods.

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