Japanese Yen: USD/JPY (JPY=X) mounting concerns that the trade war between the U.S. and China could persist longer and curb GDP growth more than first thought
This week is a holiday shortened week because of a U.S. banking holiday on Monday. There are no major reports from Japan. The major report from the U.S. is Preliminary GDP data. It is expected to come in at 3.1%, down from 3.2%.
A lower number could drive the USD/JPY lower because it will be a further indicating of a weakening U.S. economy. Treasury yields are likely to fall on the news as investors increase their bets on a Fed rate cut later in the year. The move would further tighten the spread between U.S. Government bond yields and Japan Government bond yields, making the U.S. Dollar a less-desirable investment.
Fed Fund futures are currently pricing in 50% chance of a cut in September and a full 25 basis-point cut by December. Traders are also looking for another rate cut for next year. As the trade war drags on the data-dependent Fed will have an easy choice in cutting rates. To some the question is not will they deliver a shift, but when.
This week’s price action and direction will continue to be controlled by the direction of U.S. Treasury yields. Yields will be influenced by demand for risk, but most of all the economic data.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 110.63.
The projected upper bound is: 110.26.
The projected lower bound is: 108.27.
The projected closing price is: 109.27.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.
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 5.4454. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 2 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 34.56. 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 9 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 -114.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 8 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 0 period(s) ago.
Rex Takasugi – TD Profile
FOREX JPY= closed up 0.020 at 109.310. Volume was 99% below average (consolidating) and Bollinger Bands were 24% wider than normal.
Open High Low Close Volume___
109.300 109.360 109.280 109.310 460
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 109.82 110.89 111.41
Volatility: 6 6 7
Volume: 81,106 87,120 100,144
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 1.9% below its 200-period moving average and is in an downward trend. Volatility is 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 15 periods.