Japanese Yen: USD/JPY (JPY=X) looking set to retrace once more
USD/JPY managed to rally from trendline support perfectly yesterday, with the pair pushing through the top end of the Bollinger band. However, with the price shifting back below the upper band, we can draw similarities with the previous occasions that we broke higher within this channel.
The past two rallies through Bollinger band resistance brought about another retracement into the channel bottom, with the sell signal coming from a drop back into the Bollinger, as is currently happening. We are also seeing the stochastic reach trendline resistance, bringing a potential shift in momentum. As such, we look likely to turn lower over the short term, yet unless we break below ¥112.04 short-term losses look like another buying opportunity.
Overall, the bias in prices is: Upwards.
By the way, prices are vulnerable to a correction towards 111.09.
The projected upper bound is: 113.64.
The projected lower bound is: 111.39.
The projected closing price is: 112.51.
A black body occurred (because prices closed lower 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 24 white candles and 25 black candles for a net of 1 black candles.
A hammer occurred (a hammer has a long lower shadow and closes near the high). Hammers must appear after a significant decline or when prices are oversold to be valid. When this occurs, it usually indicates the formation of a support level and is thus considered a bullish pattern.
A hanging man occurred (a hanging man has a very long lower shadow and a small real body). This pattern can be bullish or bearish, depending on the trend. If it occurs during an uptrend (which appears to be the case with FOREX JPY=) it is called a hanging man line and signifies a reversal top. If it occurs during a downtrend it is called a bullish hammer.
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).
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 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 77.1512. 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 62.37. 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 sell 47 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 95. This is not a topping or bottoming area. The last signal was a sell 0 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 21 period(s) ago.
Rex Takasugi – TD Profile
FOREX JPY= closed down -0.050 at 112.510. Volume was 97% below average (consolidating) and Bollinger Bands were 0% wider than normal.
Open High Low Close Volume___
112.560 112.580 112.260 112.510 3,296
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 112.08 111.39 109.75
Volatility: 6 6 8
Volume: 85,132 100,851 104,893
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 2.5% above its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into JPY= (mildly bullish). Our trend forecasting oscillators are currently bullish on JPY= and have had this outlook for the last 11 periods.