Japanese Yen: USD/JPY (JPY=X) preparing for a breakout
Amid the recent pressure on U.S. stocks, traditional safe-haven assets have not performed well. Weakness in the Japanese yen, Swiss franc, and gold have highlighted the limited interest in fleeing from U.S. equities. However, this dynamic may be ready to shift.
A reversal of today’s early rallies in the DJIA and S&P 500 is prompting many investors to consider moving into safe-havens. At the moment, this notion is becoming more and more relevant. We are seeing slight gains in gold, the Swiss franc, and some selling the USD/JPY.
Several upcoming fundamentals are poised to drive action to the USD/JPY. It will be wise to pay attention to this afternoon’s scheduled speech for FED Chairman Jerome Powell. His comments will be scrutinized, especially as they pertain to last week’s Midterm Elections. While central bankers usually steer clear of politics, I expect Powell to address the outcome and potential impact of a split U.S. government in some capacity.
In the event that we see a bullish break, a sell from yearly highs in the USD/JPY will come into play. Going short from 114.44 is a positive entry to the bear and a moderate profit target is warranted. This trade produces a tight 15 pips on a 1:1 risk vs reward management plan and an initial stop loss at 114.59.
Overall, the bias in prices is: Upwards.
By the way, prices are vulnerable to a correction towards 112.48.
The projected upper bound is: 114.85.
The projected lower bound is: 112.52.
The projected closing price is: 113.68.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white 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 61.7819. This is not an overbought or oversold reading. The last signal was a sell 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 58.04. 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 sell 29 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 60. This is not a topping or bottoming area. The last signal was a sell 1 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 buy 10 period(s) ago.
Rex Takasugi – TD Profile
FOREX JPY= closed down -0.160 at 113.640. Volume was 23% above average (neutral) and Bollinger Bands were 0% wider than normal.
Open High Low Close Volume___
113.790 114.000 113.280 113.640 132,137
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 113.51 112.72 110.07
Volatility: 4 7 7
Volume: 112,080 109,063 108,333
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 3.2% above its 200-period moving average and is in an upward 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 bullish on JPY= and have had this outlook for the last 4 periods.