Japanese Yen: USD/JPY (JPY=X) – Strengthens Over 109.938, Weakens Under 109.876
The Dollar/Yen is trading higher on Wednesday as a slight decline in the number of new coronavirus cases lifted risk appetite. The number of new virus cases fell for a second straight day, even as the death toll in mainland China crossed 2,000 on Wednesday.
Investors read that news as a positive along with hopes that China would roll out more stimulus to support its virus-hit economy, especially for a cut in its benchmark loan prime rate due to be announced on Thursday.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through 110.133 will signal a resumption of the uptrend. The main trend will change to down on a more through 108.313. This is highly unlikely, but we will be watching for a closing price reversal top if the stock market turns lower.
The minor trend is also up. A trade through 109.619 will change the minor trend to down and shift momentum to the downside. This is followed closely by a second minor bottom at 109.534.
The minor range is 110.133 to 109.619. Its 50% level or pivot at 109.876 is providing support today.
Daily Technical Forecast
Based on the early price action, the direction of the USD/JPY the rest of the session on Wednesday is likely to be determined by trader reaction to the price cluster at 109.938 to 109.931.
Overall, the bias in prices is: Upwards.
By the way, prices are vulnerable to a correction towards 109.29.
The projected upper bound is: 112.35.
The projected lower bound is: 110.24.
The projected closing price is: 111.29.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 4 white candles and 4 black candles. During the past 50 bars, there have been 25 white candles and 23 black candles for a net of 2 white 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 71.7105. This is not an overbought or oversold reading. The last signal was a sell 6 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 70.56. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 136 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 215.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 4 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 9 period(s) ago.
Rex Takasugi – TD Profile
FOREX JPY= closed up 1.380 at 111.240. Volume was 5% above average (neutral) and Bollinger Bands were 31% wider than normal.
Open High Low Close Volume___
109.860 111.580 109.830 111.240 84,916
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 109.98 109.43 108.38
Volatility: 8 6 7
Volume: 85,011 77,576 86,839
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 2.6% above its 200-period moving average and is in an upward 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 bullish on JPY= and have had this outlook for the last 8 periods. Our momentum oscillator is currently indicating that JPY= is currently in an overbought condition.