Japanese Yen: USD/JPY (JPY=X) Return of Risk Appetite

Japanese Yen: USD/JPY (JPY=X) Return of Risk Appetite

Japanese Yen: USD/JPY (JPY=X) Return of Risk Appetite

Investor risk appetite returned amid optimism that the US-China trade agreement could happen and the USD/JPY pair had a better chance of an upward correction to the 109.20 resistance early Tuesday, which could trigger bulls to push the pair into 110 psychological resistance, which supports the uptrend strength. Optimism about the future of the US economy continues to support the dollar’s strength against other major currencies. As for the conflict with China, the latter has announced that it will lift sanctions on intellectual property violations. It will also lower the thresholds for criminal penalties for such violations and make it easier for victims to obtain compensation. This may seem like a concession to the United States, which has been pushing hard for greater protection of intellectual property rights. However, the problem is often not that China has wrong laws, but that laws are not enforced.

On the other hand. The International Monetary Fund (IMF) called on the Japanese government and the Bank of Japan to intensify their cooperation with the approval of Prime Minister Abe’s financial plans (additional budget in light of the sales tax and insolvency increase). The fund suggested that the Bank of Japan target short-term interest rates while cutting its purchases of long-term bonds to increase the yield curve. The IMF also proposed that the central bank adopt an inflation target rather than a point target to strengthen its resilience, and reiterated its call for structural reforms. This year’s GDP growth forecast was cut to 0.8% from 0.9% and a 0.5% in 2020.

According to the technical analysis of the pair: The USD/JPY bullish trend is increasing support from stability above 109.00 resistance, because it stimulates the bulls to push the pair to 110 psychological resistance, which strengthens the trend. Only a move towards 108.00 support and stability below it would be a strong threat. The pair is in a cautious wait while monitoring the developments of trade talks between the United States and China and formally announcing an agreement to stop their tariff warfare that is plaguing the world economy as a whole.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 109.99.

The projected lower bound is: 108.13.

The projected closing price is: 109.06.

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 27 white candles and 22 black candles for a net of 5 white candles.

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 73.4441. This is not an overbought or oversold reading. The last signal was a sell 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 58.03. 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 75 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 65. This is not a topping or bottoming area. The last signal was a sell 11 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 9 period(s) ago.

Rex Takasugi – TD Profile

FOREX JPY= closed up 0.140 at 109.040. Volume was 1% below average (neutral) and Bollinger Bands were 46% narrower than normal.

Open     High      Low     Close     Volume___
108.910 109.190 108.860 109.040 91,227
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 108.69 108.32 108.93
Volatility: 4 5 7
Volume: 88,818 89,198 90,375

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 0.1% above 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 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 0 periods.

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