Japanese Yen: USD/JPY (JPY=X) Investors now shift their focus to this week’s important US macro releases

Japanese Yen: USD/JPY (JPY=X) Investors now shift their focus to this week’s important US macro releases

Japanese Yen: USD/JPY (JPY=X) Investors now shift their focus to this week’s important US macro releases

The USD/JPY pair quickly retreated around 30-pips from near two-week tops, albeit has managed to hold its neck comfortably above the 108.00 handle.

The pair built on last week’s goodish recovery move from multi-month lows and opened with a bullish gap at the start of a new trading week amid fading safe-haven demand. A trade war truce between the US and China triggered a fresh wave of global risk-on trade, which eventually dampened demand for traditional safe-haven currencies, such as the Japanese Yen. 

The latest positive development forced investors to scale back their expectations for a 50bps Fed rate cut move in July. The same was evident from a goodish pickup in the US Treasury bond yields, which underpinned demand for the US Dollar and provided an additional boost to the major.

Despite supporting factors, bullish traders lacked any strong conviction amid persistent worries about slowing global growth – reinforced by Monday’s disappointing release of Chinese and Euro-zone manufacturing PMI prints for the month of June, though the pullback now seems more likely to remain limited ahead of this’s week’s important US macro data.

A busy week of US economic releases kicks off with the release of ISM manufacturing PMI, which might provide some short-term trading impetus later during the early North-American session. The key focus, however, will be on Friday’s closely watched US monthly jobs report -popularly known as NFP, which might help determine the pair’s next leg of a directional move.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 109.38.

The projected lower bound is: 107.28.

The projected closing price is: 108.33.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 5 black candles for a net of 2 black candles. During the past 50 bars, there have been 20 white candles and 28 black candles for a net of 8 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 89.1068. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 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 49.79. 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 4 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 72. This is not a topping or bottoming area. The last signal was a buy 4 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 down -0.030 at 108.400. Volume was 96% below average (consolidating) and Bollinger Bands were 18% narrower than normal.

Open High Low Close Volume___
108.420 108.470 108.380 108.400 3,508

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

Moving Averages: 10-period     50-period     200-period
Close: 107.74 109.31 110.98
Volatility: 7 6 7
Volume: 84,264 88,224 99,408

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 2.3% below its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 41 periods.

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