Japanese Yen: USD/JPY (JPY=X) – US Dollar Breaks Through Major Support

Japanese Yen: USD/JPY (JPY=X) – US Dollar Breaks Through Major Support

Japanese Yen: USD/JPY (JPY=X) – US Dollar Breaks Through Major Support

The US dollar has broken down significantly during the trading session on Thursday, slicing through the bottom of several hammers that had formed over the last several days. At this point, the ¥112 level is an area that seems to be crucial for traders to pay attention to as it is such resistance that it’s difficult to imagine that we are going to simply slice through there. Ultimately, the market could go down to the ¥108 level underneath, perhaps even further. After all, the Japanese yen is a bit of a safety currency, so keep that in mind if we get a lot of negative headlines.

Ultimately, we turn around a break above the ¥112 level eventually, the market then goes looking towards the ¥114 level after that. The candlestick is a relatively negative, and therefore I think that there are a lot of people looking at this as an opportunity to start selling again, and perhaps continue the overall bounce back and forth that we have seen. The pair tends to be very sensitive to headline risks, and the new unemployment claims in the United States of course will have shocked some people. That being said, there is still a huge demand for US dollar so I think that this pullback will probably be somewhat limited in its scope, and I’m not expecting some type of major meltdown. Ultimately, it’s a short-term selling opportunity followed by a somewhat medium-term buying opportunity. I do not want to put in a huge position though, because of all of the volatility.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 111.76.

The projected lower bound is: 104.99.

The projected closing price is: 108.38.

Candlesticks

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 22 white candles and 26 black candles for a net of 4 black candles.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

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 39.7347. This is not an overbought or oversold reading. The last signal was a sell 1 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 48.74. 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 13 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 19. This is not a topping or bottoming area. The last signal was a sell 1 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 buy 8 period(s) ago.

Rex Takasugi – TD Profile

FOREX JPY= closed down -1.170 at 108.410. Volume was 61% below average (consolidating) and Bollinger Bands were 184% wider than normal.

Open     High      Low     Close     Volume___
109.580 109.700 108.230 108.410 38,481
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 109.47 108.95 108.32
Volatility: 24 20 12
Volume: 152,775 116,704 93,770

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 0.1% above 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 5 periods.

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