Japanese Yen: USD/JPY (JPY=X) possible long term “buy-and-hold” scenario

Japanese Yen: USD/JPY (JPY=X) possible long term “buy-and-hold” scenario

Japanese Yen: USD/JPY (JPY=X) possible long term “buy-and-hold” scenario

The US dollar has rallied a bit against the Japanese yen initially during the trading session on Wednesday, but as you can see has given back a bit of strength. At this point, I think we are trying to build up a little bit of support in this area, especially as the 50 day EMA is sitting just at the 200 day EMA and likely to cross. If it does in fact cross, it becomes the “golden cross” which is a longer-term “buy-and-hold” scenario. The 100 day ¥0.50 level looks to be supportive, and therefore it’s likely that we do get a bit of a bounce.

Ultimately, if we can break above the top of the range for the trading session on Wednesday, then it also shows that we could go much higher and reach towards the crucial ¥110 level. The ¥110 level is the gateway to much higher pricing and opens up the possibility of the market moving towards the ¥111 level given enough time. Beyond that, we then have the ¥112.50 level, but we need some type of “risk on scenario” that we can continue to go forward. That being said, this is a market that I think continues to see a lot of volatility. I favor the upside, but I also recognize that the market will continue to go back and forth on the latest risk appetite based headline. Obviously, this is a very jittery market as it gives back and forth as to whether or not the Americans and Chinese can come together.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 110.24.

The projected lower bound is: 108.47.

The projected closing price is: 109.36.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 26 white candles and 23 black candles for a net of 3 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 60.2736. This is not an overbought or oversold reading. The last signal was a buy 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 58.46. 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 87 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 27. This is not a topping or bottoming area. The last signal was a sell 8 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 6 period(s) ago.

Rex Takasugi – TD Profile

FOREX JPY= closed up 0.770 at 109.310. Volume was 4% below average (neutral) and Bollinger Bands were 41% narrower than normal.

Open     High      Low     Close     Volume___
108.550 109.440 108.440 109.310 86,343
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 108.84 108.63 108.79
Volatility: 6 5 7
Volume: 81,547 86,891 89,649

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 0.5% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 8 periods.

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