Japanese Yen: USD/JPY (JPY=X) risk aversion continues to dominate the market
Despite the broad-based USD strength, the USD/JPY pair is posting losses for the second straight day on Thursday as the sour market sentiment continues to help the JPY outperform its rivals. As of writing, the pair was down 0.25% on a daily basis at 110.07.
With the U.S.-China trade tension remaining high and concerns over the possibility of a no-deal Brexit escalating, investors continued to move away from risk-sensitive assets on Thursday. Reflecting the flight-to-safety, major equity indexes in Asia closed the day in the negative territory and European stocks are now suffering heavy losses with Germany’s DAX and the UK’s FTSE both erasing around 1.5% on a daily basis.
Additionally, the 10-year US T-bond yield is losing nearly 2% on the day to confirm the dismal mood and allowing the bearish pressure on the pair stay intact.
On the other hand, with the greenback outperforming its major European rivals, the US Dollar Index is inching closer to its highest level since May 2017 that was set in late April at 98.33. At the moment, the DXY is up 0.1% on the day at 98.20.
Later in the day, weekly jobless claims, new home sales, and the IHS Markit’s Manufacturing and Service PMI reports from the U.S. will be looked upon for fresh impetus.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 110.64.
The projected upper bound is: 110.43.
The projected lower bound is: 108.42.
The projected closing price is: 109.43.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black 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 58.2927. This is not an overbought or oversold reading. The last signal was a sell 0 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 35.96. 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 7 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 -39. This is not a topping or bottoming area. The last signal was a buy 6 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 2 period(s) ago.
Rex Takasugi – TD Profile
FOREX JPY= closed down -0.870 at 109.470. Volume was 2% below average (neutral) and Bollinger Bands were 33% wider than normal.
Open High Low Close Volume___
110.340 110.360 109.450 109.470 89,898
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 109.87 110.97 111.41
Volatility: 7 6 7
Volume: 91,391 88,373 100,699
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 1.7% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 13 periods.