Japanese Yen: USD/JPY (JPY=X) reverses off downtrend resistance- risk for further losses sub-108.18

Japanese Yen: USD/JPY (JPY=X) reverses off downtrend resistance- risk for further losses sub-108.18

Japanese Yen: USD/JPY (JPY=X) reverses off downtrend resistance- risk for further losses sub-108.18

The Japanese Yen snapped a four-day losing streak against the US Dollar yesterday with price marking a reversal pattern off daily confluence resistance. These are the updated targets and invalidation levels that matter on the USD/JPY price charts this week.

Technical Outlook

In my previous Japanese Yen Weekly Price Outlook we noted that the USD/JPY rally was, “testing downtrend resistance here and puts the immediate advance at risk while below 108.42.” Price has been testing this key threshold for the last two-weeks with USD/JPY posting and outside-day reversal off the highlighted resistance confluence yesterday. Note that the 1.5% parallel of the broader descending pitchfork we’ve been tracking off the yearly highs converges on the 50% retracement of the yearly range here and continues to highlight this critical pivot zone.

Key daily support rests at the June low / 38.2% retracement at 106.78/94 – a break / close below this level is needed to mark resumption of the broader downtrend targeting 106. A topside breach would shift the focus towards subsequent resistance objectives at 109.02, the 61.8% retracement at 109.35 and the objective yearly open at 109.67.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 107.84.

The projected upper bound is: 108.61.

The projected lower bound is: 105.71.

The projected closing price is: 107.16.

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 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.

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 24.4239. This is not an overbought or oversold reading. The last signal was a sell 2 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 46.94. 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 37 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 -133.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 10 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 7 period(s) ago.

Rex Takasugi – TD Profile

FOREX JPY= closed up 0.020 at 107.190. Volume was 100% below average (consolidating) and Bollinger Bands were 37% narrower than normal.

Open     High      Low     Close     Volume___
107.170 107.220 107.170 107.190 84
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 107.58 107.02 109.11
Volatility: 7 9 7
Volume: 80,901 92,630 91,089

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 1.8% below 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 19 periods.

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