Japanese Yen: USD/JPY (JPY=X) posted four straight winning weeks, possible consolidation phase
USD/JPY is almost unchanged on Wednesday. In the North American session, the pair is trading at 109.57, down 0.03% on the day. There are no major Japanese events. In the U.S., retail sales and core retail sales both missed expectations. On Thursday, the U.S. releases three key indicators – building permits, unemployment claims and the Philly Fed Manufacturing Index.
U.S. retail sales in April were weaker than forecast, but the yen didn’t take advantage. Retail sales declined 0.2%, after a strong gain of 1.6% in March. Core retail sales posted a small gain of 0.1%, much lower than the estimate of 0.7%.
Another round of tariffs between the U.S. and China has triggered sharp swings in the equity markets. This has also led to significant volatility from USD/JPY, as the safe-haven yen has climbed when risk appetite has sagged, and conversely, the yen has fallen when trade tensions have eased and risk apprehension has declined. The yen has posted four straight winning weeks, corresponding to sharp declines on global equity markets. The new tariffs are set to take effect in several weeks and could continue to cause volatility in the stock markets. If this happens, traders can also expect swings in the movement of USD/JPY.
In the latest bout between the two super-economies, the U.S. slapped tariffs on $200 billion in Chinese products, and China responded with counter-tariffs on $60 billion in U.S. products. Despite the tariff tussle, talks continue between the U.S. and China, with the next round of negotiations scheduled for Beijing. The tariffs have made huge headlines, but do not take effect for several weeks.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 110.71.
The projected upper bound is: 110.48.
The projected lower bound is: 108.55.
The projected closing price is: 109.52.
A black body occurred (because prices closed lower than they opened).
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 23 white candles and 27 black candles for a net of 4 black candles.
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 33.4904. This is not an overbought or oversold reading. The last signal was a buy 1 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 31.26. 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 1 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 -93. This is not a topping or bottoming area. The last signal was a buy 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 sell 14 period(s) ago.
Rex Takasugi – TD Profile
FOREX JPY= closed down -0.030 at 109.560. Volume was 7% below average (neutral) and Bollinger Bands were 55% wider than normal.
Open High Low Close Volume___
109.600 109.700 109.140 109.560 85,677
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 110.18 111.13 111.44
Volatility: 5 6 7
Volume: 87,074 88,574 101,379
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 1.7% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. 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 7 periods.