Japanese Yen: USD/JPY (JPY=X) is back within its old uptrend
The Japanese Yen has returned to the defensive against the US Dollar after a period of daily-chart strength last week, with USD/JPY well illustrating the value of Fibonacci retracement levels to technical analysis.
Between April 7 and 10 the pair retreated below the uptrend channel which had previously bounded trade since the lows of March 25. A surge in market risk aversion saw the Dollar and Yen locked in a ‘battle of the havens’ which the latter seemed to be winning. USD/JPY saw three consecutive days of quite heavy falls up to April 10.
However, then Mr. Fibonacci took charge. USD/JPY’s fall duly halted at the first, 23.6% retracement level of 2019’s rise.
That came in at 110.86 which, not at all coincidentally, was the intraday low of April 10. Since then the pair has edged albeit gingerly back into that uptrend channel and, perhaps as significantly, risen back into the important resistance zone composed of the previous significant highs. They were struck in early March.
It is notable however that USD/JPY remains biased towards the bottom of its uptrend channel and has yet to seriously threaten the top of that resistance band. It doesn’t look terribly overbought according to its momentum indicators so the uncommitted might be well advised to wait a couple of days and see how things go.
If the Dollar can remain comfortable in both uptrend and resistance zone, then it might not be unreasonable to expect a further push higher. That said the next significant top is December’s 113.69 and that will probably remain too much for the bulls to hope for anytime soon. Falls are likely to find support again at that first retracement level, with the second waiting below at 110.07.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 110.98.
The projected upper bound is: 113.09.
The projected lower bound is: 111.08.
The projected closing price is: 112.08.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 28 white candles and 20 black candles for a net of 8 white 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.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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 92.0002. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 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 61.79. 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 71 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 132.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 5 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 buy 9 period(s) ago.
Rex Takasugi – TD Profile
FOREX JPY= closed up 0.020 at 112.040. Volume was 37% below average (neutral) and Bollinger Bands were 17% narrower than normal.
Open High Low Close Volume___
112.000 112.090 111.870 112.040 60,379
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 111.55 111.00 111.51
Volatility: 5 6 7
Volume: 85,100 92,773 103,386
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 0.5% 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 2 periods.
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