Japanese Yen: USD/JPY (JPY=X) struggling to extend the momentum beyond the 109.00 handle
The USD/JPY pair refreshed multi-week tops during the Asian session on Wednesday, albeit struggled to extend the momentum beyond the 109.00 handle.
Following last week’s upbeat headline NFP print for June, diminishing odds for a 50bps point rate cut by the Fed led to a solid rebound in the US Treasury bond yields and turned out to be one of the key factors behind the recent US Dollar rally to near three-week tops.
The pair built on its recent recovery move from multi-month lows and climbed to its highest level since May 31, though a combination of negative forces held investors from placing any aggressive bets and kept a lid on any strong follow-through beyond 50-day SMA.
The prevalent cautions mood, as depicted by a subdued action in equity markets, extended some support to the Japanese Yen’s safe-haven status and seemed to cap gains ahead of the Fed Chair Jerome Powell’s two-day congressional testimony, starting this Wednesday.
Powell’s comments, followed by the release of the June FOMC meeting minutes will be closely scrutinized for clues about the central bank’s monetary policy outlook and the next move at the upcoming meeting on July 30-31, which should provide a fresh directional impetus.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 109.42.
The projected lower bound is: 107.23.
The projected closing price is: 108.33.
A black body occurred (because prices closed lower 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 21 white candles and 27 black candles for a net of 6 black 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 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 68.7815. 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 50.16. 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 11 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 61. This is not a topping or bottoming area. The last signal was a sell 0 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 down -0.070 at 108.390. Volume was 99% below average (consolidating) and Bollinger Bands were 12% narrower than normal.
Open High Low Close Volume___
108.450 108.460 108.370 108.390 1,087
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 108.26 108.84 110.79
Volatility: 6 6 7
Volume: 75,026 88,655 98,395
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 2.2% below its 200-period moving average and is in an upward trend. Volatility is high 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 3 periods.