Home FX Japanese Yen: USD/JPY (JPY=X) under pressure

Japanese Yen: USD/JPY (JPY=X) under pressure

Japanese Yen: USD/JPY (JPY=X) under pressure

The Dollar/Yen is under pressure on Thursday after the yield on the benchmark 10-year U.S. Treasury note resumed its slide and fell to a new record low as concerns over the impact of the coronavirus weakened global equity markets, sending investors into the safe-haven Japanese Yen.

The move lower in yields also reflects traders’ expectations the Federal Reserve will step in at some point and cut rates. However, many economists doubt the central bank will deliver such relief and whether it will be effective.

Lower U.S. rates will tighten the spread between U.S. Government bonds and Japanese Government bonds, thereby making the U.S. Dollar a less attractive investment.

Daily Technical Forecast

Based on the early price action and the current price at 109.911, the direction of the USD/JPY the rest of the session on Thursday is likely to be determined by trader reaction to the short-term Fibonacci level at 109.808.

Bearish Scenario

A sustained move under 109.808 will indicate the presence of sellers. This could trigger a plunge into the nearest uptrending Gann angle at 109.506, followed closely by the major Fib level at 109.361.

Bullish Scenario

A sustained move over 109.808 will signal the return of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the short-term 50% level at 110.270. This is a potential trigger point for an acceleration into a resistance cluster at 110.712.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 109.57.

The projected upper bound is: 110.82.

The projected lower bound is: 108.32.

The projected closing price is: 109.57.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 5 black candles for a net of 1 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 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 8.3215. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 4 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 45.77. 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 sell 5 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 -85. This is not a topping or bottoming area. The last signal was a sell 4 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 1 period(s) ago.

Rex Takasugi – TD Profile

FOREX JPY= closed down -0.010 at 109.570. Volume was 100% below average (consolidating) and Bollinger Bands were 61% wider than normal.

Open     High      Low     Close     Volume___
109.590 109.600 109.550 109.570 182
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 110.52 109.60 108.40
Volatility: 12 7 7
Volume: 94,648 80,975 87,188

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% 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 15 periods.

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S. Jack Heffernan Ph.D. Economist at Knightsbridge holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Crypto, Mining, Shipping, Technology and Financial Services.