Japanese Yen: USD/JPY (JPY=X) Renewed Fears Over Trade Talks

Japanese Yen: USD/JPY (JPY=X) Renewed Fears Over Trade Talks

Japanese Yen: USD/JPY (JPY=X) Renewed Fears Over Trade Talks

The Dollar/Yen is trading lower on Wednesday as safe-haven buying drew investors into the Japanese Yen. Although some market participants are calling President Trump’s State of the Union address a “dud”, Dollar/Yen traders seem to be leaning to the negative side. Trump didn’t say much to excite the bulls in the stock market, but may have stoked some fears as he vowed to build a wall between the U.S. and Mexico border.

Trump continued to push for the building of the wall despite huge opposition from the Democrats. He said the border wall was needed to stem illegal immigration and smuggled drugs, but stopped short of declaring the issue a national emergency. In continuing to talk about building the wall, Trump raised concerns over the risk of another government shutdown. This was enough to send investors into the safety of the Japanese Yen.

Trump also offered little clarity over the on-going trade negotiations between the U.S. and China, which ended last week. After offering upbeat comments at the end of the discussions, Trump failed to follow-through on Monday with similar comments.

In his speech, Trump said any trade agreement with China “must include real, structural change to end unfair trade practices, reduce our chronic trade deficit, and protect American jobs.”

Finally, Trump also briefly mentioned budge issues, but provided investor few surprises, leading to early session weakness in the stock market.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 111.35.

The projected lower bound is: 108.46.

The projected closing price is: 109.91.

Candlesticks

A white body occurred (because prices closed higher 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 24 white candles and 26 black candles for a net of 2 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.

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 87.4250. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 10 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 53.91. 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 23 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 100.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 9 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 16 period(s) ago.

Rex Takasugi – TD Profile

FOREX JPY= closed up 0.020 at 109.980. Volume was 4% below average (neutral) and Bollinger Bands were 33% narrower than normal.

Open High Low Close Volume___
109.960 110.050 109.540 109.980 105,419

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 109.51 110.56 111.26
Volatility: 5 8 7
Volume: 98,625 103,346 105,312

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 1.1% below its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 7 periods.

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