Japanese Yen: USD/JPY (JPY=X) Investors are keeping a close eye on the Federal Reserve meeting

Japanese Yen: USD/JPY (JPY=X) Investors are keeping a close eye on the Federal Reserve meeting

Japanese Yen: USD/JPY (JPY=X) Investors are keeping a close eye on the Federal Reserve meeting

USD/JPY has posted slight losses on Wednesday. In the North American session, the pair is trading at 110.29, down 0.18% on the day. In economic news, Japan released strong numbers. Core Machinery Orders climbed 3.8%, crushing the estimate of o.0%. This marked a 5-month high. Japan’s trade deficit narrowed to JPY 11.0 trillion, beating the estimate of JPY 12.0 trillion. In the U.S. today’s highlight is the minutes of the Federal Reserve’s policy meeting earlier this month. On Thursday, the U.S. releases unemployment claims.

Investors are keeping a close eye on the Federal Reserve meeting. Will the minutes point to any bias regarding the next rate move? At the May meeting, the Federal Reserve maintained the benchmark rate for a fourth straight month. The rate statement noted that inflation pressures remain muted and that the FOMC would remain patient regarding future rate movements. Jerome Powell reinforced this stance after the meeting, saying that “we don’t see a strong case for moving in either direction”. The Fed is already on record as saying it does not expect to raise rates before 2020, and with inflation levels persistently below the Fed’s target of 2.0%, the Fed can afford to continue its wait-and-see stance.

Trade tensions between the U.S. and China have escalated in recent weeks, causing strong volatility on global equity markets. This has also affected the movement of the Japanese yen, which is a safe-haven asset. It has been a tale of two Mays for the Japanese currency. The yen posted strong gains in the first half of the month, but has reversed directions and given up much of those gains. With the equity markets continuing to show strong swings and risk appetite unsteady, traders should be prepared for more volatility from USD/JPY.

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 110.65.

The projected upper bound is: 111.26.

The projected lower bound is: 109.37.

The projected closing price is: 110.31.

Candlesticks

During the past 10 bars, there have been 5 white candles and 4 black candles for a net of 1 white candles. During the past 50 bars, there have been 23 white candles and 26 black candles for a net of 3 black candles.

A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).

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 79.3610. This is not an overbought or oversold reading. The last signal was a sell 0 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 46.12. 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 64. This is not a topping or bottoming area. The last signal was a buy 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 buy 2 period(s) ago.

Rex Takasugi – TD Profile

FOREX JPY= closed unchanged at 110.340. Volume was 99% below average (consolidating) and Bollinger Bands were 28% wider than normal.

Open High Low Close Volume___
110.340 110.350 110.280 110.340 1,133

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

Moving Averages: 10-period 50-period 200-period
Close: 109.95 110.99 111.42
Volatility: 5 5 7
Volume: 82,515 86,598 100,255

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 1.0% below its 200-period moving average and is in an downward 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 bearish on JPY= and have had this outlook for the last 13 periods.

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