Japanese Yen: USD/JPY (JPY=X) Ready to Pull Back

Japanese Yen: USD/JPY (JPY=X) Ready to Pull Back

Japanese Yen: USD/JPY (JPY=X) Ready to Pull Back

The US dollar went back and forth during the trading session on Friday as we had broken above the ¥110 level, but still are simply sitting around. At this point, I think that the market is running into a bit of exhaustion, perhaps needing to pull back a bit. The fact that we did up forming a bit of a shooting star suggests that the pullback is most certainly needed. If we do get that pull back, then I believe that the ¥109.60 level should offer significant support as it was previous resistance.

If we do break out to the upside, the market is likely to go looking towards the gap above near the ¥111 level. With this being the case, I think it’s only a matter of time before we get to that level, and then perhaps break above there to go looking towards the ¥112.33 level. Because of this, the market is likely to continue to see a push higher, but we may need to find momentum building pullbacks and at this point been so extended the way we are, it’s likely that a pullback will be welcomed by even the bullish traders.

Keep in mind that the USD/JPY pair is highly sensitive to risk appetite, so if the markets continue to look “happy” in general, as seen by risk appetite as far as stock markets are concerned and the like. Ultimately, the Japanese yen is considered to be a major “safety currency”, so it makes sense that it would lose value in a situation where people are willing to take advantage of shorting that currency. At this point, look for a pullback and then take advantage of it. However, if we do blow through the top of the shooting star that’s also a very bullish sign as well. After a move like this, markets will typically do one of two things, either pullback to find buyers underneath, or grind back and forth sideways simply killing time in order to build up momentum.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 109.08.

The projected upper bound is: 111.00.

The projected lower bound is: 109.38.

The projected closing price is: 110.19.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.

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.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 85.4461. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 11 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 65.63. 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 114 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 85. This is not a topping or bottoming area. The last signal was a sell 1 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 buy 6 period(s) ago.

Rex Takasugi – TD Profile

FOREX JPY= closed up 0.030 at 110.170. Volume was 14% below average (neutral) and Bollinger Bands were 36% wider than normal.

Open     High      Low     Close     Volume___
110.140 110.210 110.020 110.170 71,176
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 109.67 109.10 108.55
Volatility: 4 5 6
Volume: 82,734 77,400 86,851

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 1.5% above its 200-period moving average and is in an upward trend. Volatility is relatively normal 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 5 periods.

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