Japanese Yen: USD/JPY (JPY=X) US dollar continues to look soft against the Japanese yen

Japanese Yen: USD/JPY (JPY=X) US dollar continues to look soft against the Japanese yen

Japanese Yen: USD/JPY (JPY=X) US dollar continues to look soft against the Japanese yen

The US dollar has rallied slightly early during the trading session on Monday, but when taken in concert with the overall trend, there’s not much to look at here. There should continue to be resistance above at the previous 61.8% Fibonacci retracement level which is essentially the top of the candle stick from the previous session.

A break above there opens the door to the ¥108.70 level, which is also resistance. However, I have found over the years that typically if the 61.8% Fibonacci retracement level gets broken, and then retested like it has, quite often you will wipe out the entire move.

Looking at this chart, it would make sense to see this pair drift down towards the ¥105 level, especially considering we are waiting on the United States and China to talk at G 20, perhaps making some type of progress. If they don’t, that will continue to weigh upon this market, and at this point it’s still my primary expectation as they have yet to make any significant progress. If that’s going to be the case then it makes sense that we would continue to see the Japanese yen favored.

Not only would that weigh upon the market, but we also have to look at the Federal Reserve and the fact that it is stepping away from a hawkish stance will also weigh upon the US dollar and favor the Japanese yen. Out of all of the major currency pairs, this is by far one of the most highly influenced by interest rate differentials, especially in the ZN/10 year contracts. Were in a downtrend, there’s no reason to fight it.

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 109.34.

The projected upper bound is: 108.20.

The projected lower bound is: 106.25.

The projected closing price is: 107.23.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 3 white candles and 6 black candles for a net of 3 black candles. During the past 50 bars, there have been 20 white candles and 29 black candles for a net of 9 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 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 15.9836. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 13 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 27.09. This is where it usually bottoms. 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 14 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 -129.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 13 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 2 period(s) ago.

Rex Takasugi – TD Profile

FOREX JPY= closed up 0.040 at 107.320. Volume was 96% below average (consolidating) and Bollinger Bands were 6% wider than normal.

Open High Low Close Volume___
107.290 107.370 107.250 107.320 3,677

Technical Outlook
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period     50-period     200-period
Close: 107.97 109.70 111.09
Volatility: 5 6 7
Volume: 79,997 87,729 99,531

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 3.4% below its 200-period moving average and is in an downward 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 bearish on JPY= and have had this outlook for the last 36 periods. Our momentum oscillator is currently indicating that JPY= is currently in an oversold condition.

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