Japanese Yen: USD/JPY (JPY=X) Pattern-break, Support in Focus

Japanese Yen: USD/JPY (JPY=X) Pattern-break, Support in Focus

Japanese Yen: USD/JPY (JPY=X) Pattern-break, Support in Focus

Just a few days ago USD/JPY tagged the trend-line from October 2018, and it was quickly greeted with selling pressure. This shoved the pair lower beneath the underside of an ascending wedge formation developing since the August low.

What is important about this formation is the context in which it is forming, that is it is part of what appears to be a corrective move on a chart that is generally leaning lower. Not trending so much, but leaning, and that tilt can be easily recognized as well by a falling 200-day MA.

The choppy rise, with its overlapping price action, smacks similar of the rally during the first half of the year after the late-2018 plunge. A breakdown from the momentum-lacking rally could set off another trend back towards the 10400s or worse.

At the moment, even though there has been a technical break on the pattern, there is still a series of higher-highs and higher-lows in place. In this low-volatility environment confirmation has become an even more important aspect to successful trading than during times of higher volatility where momentum-moves develop more fluidly.

To begin snapping the bullish price sequence a closing daily bar below the November 14 low at 10824 is needed. This will put into place a lower-low and give shorts a better shot at seeing the trading bias flip in their favor. There could be a bounce shortlythereafter, but as long as it results in a lower-high from Monday’s high, a new downward trend could start to grow legs.

For now, respecting the intermediate-term trend and support, but that respect could dissipate quickly if the ascending wedge holds true to its bearish implications.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 109.76.

The projected lower bound is: 108.00.

The projected closing price is: 108.88.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 27 white candles and 22 black candles for a net of 5 white 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 21.0527. This is not an overbought or oversold reading. 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 50.82. 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 81 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 -35. This is not a topping or bottoming area. The last signal was a sell 2 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 0.240 at 108.860. Volume was 1% above average (neutral) and Bollinger Bands were 44% narrower than normal.

Open     High      Low     Close     Volume___
108.630 108.960 108.410 108.860 93,545
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 109.02 108.50 108.88
Volatility: 5 5 7
Volume: 85,599 88,292 89,974

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 0.0% below its 200-period moving average and is in an downward trend. Volatility is low 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 2 periods.

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