Japanese Yen: USD/JPY (JPY=X) investors react to a mixed performance in the global equity markets
The Dollar/Yen is trading nearly flat on Tuesday as investors react to a mixed performance in the global equity markets. Helping to put a lid on the Forex pair is the plunge in Asia Pacific shares. Underpinning the Forex pair are the steady stock market performance in Europe and calls for a higher opening in the United States.
The catalyst behind the price action remains fear over the spread of the deadly coronavirus, its impact on China, and its potential impact on the global economy.
Throughout Tuesday’s session, USD/JPY traders will be influenced by demand for risky assets and the direction of U.S. Treasury yields. Lower demand for risky assets and lower yields will keep the downside pressure on the Dollar/Yen. An easing of pressure on stocks and firmer yields will encourage investors to trim positions in the safe-haven Japanese Yen.
Japan Economic News
The Bank of Japan (BoJ) reported that the Services Producer Price Index rose by 2.1% in December from a year ago, the same as in the previous three months and in line with expectations. Month-on-month, the index was unchanged, slowing from the November increase of 0.2%.
The BoJ also reported that the core Consumer Price Index (CPI) rose by 0.3% in December, year-on-year, whereas experts were expecting the same 0.2% rate of growth as in the preceding month.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 109.12.
The projected upper bound is: 109.98.
The projected lower bound is: 108.33.
The projected closing price is: 109.15.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 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 (which appears to be the case with FOREX JPY=). It then signifies that the momentum may be shifting from the bears to the bulls.
If the engulfing bullish pattern occurs during an uptrend, 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 17.9026. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 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 46.03. 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 120 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 -129.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 7 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 2 period(s) ago.
Rex Takasugi – TD Profile
FOREX JPY= closed up 0.250 at 109.140. Volume was 2% below average (neutral) and Bollinger Bands were 40% wider than normal.
Open High Low Close Volume___
108.880 109.190 108.740 109.140 80,369
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 109.68 109.19 108.47
Volatility: 4 5 7
Volume: 78,057 76,821 86,662
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 0.6% above its 200-period moving average and is in an upward 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 bullish on JPY= and have had this outlook for the last 11 periods.
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