Japanese Yen: USD/JPY (JPY=X) testing weekly downtrend resistance ahead of Fed
The US Dollar has rallied more than 3.6% against the Japanese Yen since the August lows / yearly lows with price now approaching broader downtrend resistance ahead of tomorrow’s highly anticipated FOMC interest rate decision. These are the updated targets and invalidation levels that matter on the USD/JPY weekly price chart.
USD/JPY is testing downtrend resistance here and puts the immediate advance at risk while below 108.42. From a trading standpoint, a good spot to reduce long-exposure / raise protective stops. A topside breach looks for a larger reaction at 109.36/68. IF price breaches this zone on FOMC BUT settles back to close the day below, look to fade strength towards 107and beyond. I’ll publish an updated USD/JPY Technical Outlook once we get further clarity on the near-term price action.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 109.57.
The projected lower bound is: 106.68.
The projected closing price is: 108.13.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white 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 84.2406. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 10 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 63.33. 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 25 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 107.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 15 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 21 period(s) ago.
Rex Takasugi – TD Profile
FOREX JPY= closed up 0.020 at 108.140. Volume was 9% above average (neutral) and Bollinger Bands were 29% wider than normal.
Open High Low Close Volume___
108.100 108.360 108.010 108.140 100,112
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 107.52 107.11 109.37
Volatility: 3 9 7
Volume: 97,303 91,966 92,508
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 1.1% 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 moderate flows of volume into JPY= (mildly bullish). Our trend forecasting oscillators are currently bullish on JPY= and have had this outlook for the last 7 periods.