Japanese Yen: USD/JPY (JPY=X) Strengthens Over 106.706, Weakens Under 106.450
The Dollar/Yen fell to a two-week low early Wednesday as risk sentiment returned to the market. On Tuesday, the selling was fueled by better-than-expected economic data from China, which painted a less gloomy picture than feared following the coronavirus outbreak there.
In today’s session investors are moving cautiously out of the U.S. Dollar after President Trump edged toward rolling back some restrictions put in place to contain the coronavirus pandemic.
At 06:44 GMT, the USD/JPY is trading 107.083, down 0.129 or -0.12%.
The greenback also remains under pressure following heavy measures by the Federal Reserve to boost dollar supply, however, analysts say it is too early for a full-scale retreat from safe-havens with the public health threat not yet eliminated.
The USD/JPY will face a major test later on Wednesday with the release of retail sales and industrial production, which is likely to provide more evidence of the economic costs of the lockdowns.
Combining the intermediate and long-term retracement zones creates a support cluster at 106.706 to 106.450. This is the area we’ll be focusing on today.
Holding above 106.706 will tell us that aggressive counter-trend buyers are coming in to support the Forex pair. If this is able to create enough upside momentum then look for the rally to possibly extend into the main Fibonacci level at 108.008.
A sustained break under 106.450 will indicate the selling pressure is getting stronger. If this creates enough downside momentum then look for the selling to possibly extend into the short-term Fibonacci level at 105.207.
Look for volatility to hit the market at 12:30 GMT with the release of the U.S. Retail and Core Retail Sales reports. The Empire State Manufacturing Index report will also be released at that time.
Later in the session, investors will get the opportunity to react to reports on Capacity Utilization, Industrial Production and the Fed Beige Book.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 111.35.
The projected lower bound is: 104.43.
The projected closing price is: 107.89.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 22 white candles and 26 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 30.5369. This is not an overbought or oversold reading. The last signal was a buy 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 47.92. 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 27 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 -38. This is not a topping or bottoming area. The last signal was a buy 1 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 sell 3 period(s) ago.
Rex Takasugi – TD Profile
FOREX JPY= closed up 0.460 at 107.930. Volume was 59% below average (consolidating) and Bollinger Bands were 19% wider than normal.
Open High Low Close Volume___
107.470 108.080 107.340 107.930 44,159
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 108.24 108.58 108.32
Volatility: 9 21 12
Volume: 130,415 134,932 98,253
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 0.4% 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.