Japanese Yen: USD/JPY (JPY=X) market isn’t quite ready to break out of the consolidation area

Japanese Yen: USD/JPY (JPY=X) market isn’t quite ready to break out of the consolidation area

Japanese Yen: USD/JPY (JPY=X) market isn’t quite ready to break out of the consolidation area

The US dollar has fallen a bit during the Japanese yen during trading on Wednesday, reaching down towards the ¥110 level. That being said, it looks as if we are starting to find our sea legs as it were, and now it looks as if we will try to find a reason to rally. As long as we can stay above the ¥109.50 level, we should turn around and try to fill the gap from the beginning of the week. That being the case, it looks as if the buyers are trying to step in and defend the pair.

It does look as if we are trying to form a hammer, and that of course is a very bullish sign. The 200 day EMA is sitting right at the gap from the Monday session, which of course is a good sign. Ultimately, this is a market that measures risk appetite, and as a result you should pay attention to the S&P 500. It does look as if it’s trying to hold the line, so if that’s going to be the case, this should benefit the USD/JPY pair.

Ultimately, I believe that the market could very well fill the gap and then try to go back towards the ¥112 level. If we get good progress between the Americans and Chinese over the next couple of days, I suspect that this pair will finally break out to the upside. Obviously, if things fall apart between the two countries, we will probably break down below that ¥109.50 level, possibly towards the ¥108 level.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 110.95.

The projected lower bound is: 109.07.

The projected closing price is: 110.01.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 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.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

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 8.6274. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 14 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 29.44. 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 89 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 -148.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 5 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 10 period(s) ago.

Rex Takasugi – TD Profile

FOREX JPY= closed down -0.060 at 110.040. Volume was 94% below average (consolidating) and Bollinger Bands were 3% wider than normal.

Open High Low Close Volume___
110.090 110.120 110.010 110.040 5,562

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

Moving Averages: 10-period 50-period 200-period
Close: 110.97 111.31 111.47
Volatility: 3 5 7
Volume: 69,123 86,660 100,740

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 1.3% 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 moderate flows of volume out of JPY= (mildly bearish). Our trend forecasting oscillators are currently bearish on JPY= and have had this outlook for the last 3 periods. Our momentum oscillator is currently indicating that JPY= is currently in an oversold condition.

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