Japanese Yen: USD/JPY (JPY=X) risks lurk around each corner as geopolitical tensions ramp up on a global scale

Japanese Yen: USD/JPY (JPY=X) risks lurk around each corner as geopolitical tensions ramp up on a global scale

Japanese Yen: USD/JPY (JPY=X) risks lurk around each corner as geopolitical tensions ramp up on a global scale

We had a brief scare on trade comments from Mnuchin and Lighthizer which sent the yen on a tear in early Asia, down to the aforementioned lows from a touch away from 111 the figure while markets stay on red alert despite sentiment that a deal will be struck at the eleventh hour. 

There was a bounce in risk as investors took the initial Sunday comments from Trump’s Tweet which was taken as a pinch of salt in U.S. markets, underpinned by the updates posted by the South China Morning Post reporters that China is still preparing to send a delegation to Washington for the trade talks despite the latest threats by  Trump to increase tariffs, Foreign Ministry, quoting spokesman Geng Shuang overnight – USD/JPY rose from 110.60 to 110.96 before the Lighthizer comments.

As a result, the dollar ended flat in the U.S session while the US 10yr treasury yield rose from the 5bp lower open at 2.48% by 2bp to 2.50% while the 2yr yield opened 4bp lower at 2.28% and moved up to 2.31%. 

Overall, the bias in prices is: Sideways.

The projected upper bound is: 111.20.

The projected lower bound is: 109.26.

The projected closing price is: 110.23.

Candlesticks

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 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.

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 16.5789. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 12 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 31.45. 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 87 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 -204.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 3 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 8 period(s) ago.

Rex Takasugi – TD Profile

FOREX JPY= closed down -0.520 at 110.240. Volume was 4% below average (neutral) and Bollinger Bands were 27% narrower than normal.

Open High Low Close Volume___
110.760 110.850 110.160 110.240 89,162

Technical Outlook
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 111.34 111.36 111.49
Volatility: 5 6 7
Volume: 77,451 88,261 101,241

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 downward trend. Volatility is 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 1 periods.

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