Japanese Yen: USD/JPY (JPY=X) likely to continue to be determined by trader reaction to Treasury yields

Japanese Yen: USD/JPY (JPY=X) likely to continue to be determined by trader reaction to Treasury yields

Japanese Yen: USD/JPY (JPY=X) likely to continue to be determined by trader reaction to Treasury yields

Even with U.S. investors pricing in a 100-percent chance of a rate cut at the Fed’s next meeting on July 31, the direction of the USD/JPY is likely to continue to be determined by trader reaction to Treasury yields. If yields firm, the Forex pair is likely to rally on short-covering and profit-taking. Weaker yields will put renewed pressure on the USD/JPY.

The Fed is going to remain data dependent ahead of its July interest rate decision so we could see a reaction to this week’s major reports including the Conference Board’s Consumer Confidence and U.S. Final GDP.

Fed Chair Jerome Powell is also scheduled to speak on Tuesday afternoon. Traders will be looking to react to any comments about monetary policy, the strength of the economy and the timing of potential rate cuts.

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 109.60.

The projected upper bound is: 108.18.

The projected lower bound is: 106.23.

The projected closing price is: 107.21.

Candlesticks

During the past 10 bars, there have been 3 white candles and 6 black candles for a net of 3 black candles. During the past 50 bars, there have been 20 white candles and 29 black candles for a net of 9 black candles.

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 13.6477. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 11 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 26.25. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 12 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 -238.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 11 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 sell 0 period(s) ago.

Rex Takasugi – TD Profile

FOREX JPY= closed up 0.010 at 107.300. Volume was 15% above average (neutral) and Bollinger Bands were 6% wider than normal.

Open High Low Close Volume___
107.300 107.730 107.040 107.300 103,704

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

Moving Averages: 10-period     50-period     200-period
Close: 108.20 109.89 111.14
Volatility: 5 6 7
Volume: 89,830 88,816 100,041

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 3.5% 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 34 periods. Our momentum oscillator is currently indicating that JPY= is currently in an oversold condition.

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