Japanese Yen: USD/JPY (JPY=X) wait for another pullback higher

Japanese Yen: USD/JPY (JPY=X) wait for another pullback higher

Japanese Yen: USD/JPY (JPY=X) wait for another pullback higher

Yesterday I opened two sell forex signals in AUD/USD and USD/JPY. USD/JPY had been retracing higher for the last two weeks after the strong decline three weeks ago, which looked like a good opportunity to sell since the pullback was overstretched. On the other hand, AUD/USD was barely retracing higher which was another strong signal to sell since the buyers couldn’t find enough strength to push higher.

I woke up this morning to see that both those signals had closed in profit. AUD/USD had tumbled as risk assets were sliding lower once again, while USD/JPY was also declining as safe havens were picking up pace overnight. This shows that the sentiment in financial markets had turned negative again.

I couldn’t find anything which could have hurt the sentiment overnight, so this is a move in anticipation of the FED meeting tomorrow. If anything, the news that Apple has resumed sales of Huawei laptops should have been positive for the sentiment, but traders are more focused on the FED right now since the US and the global economies have slowed considerably.

So, as the sentiment has turned negative again, the plan now is to wait for another pullback higher in USD/JPY and then try to open another sell signal in this pair. Yesterday we sold this pair below the 100 SMA (green) on the H4 time-frame, which provided solid resistance for the second time in a few weeks. That moving average looks like a good place to look for another short signal here, so that’s what we will do – wait for a pullback up there and sell when stochastic becomes overbought.

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 109.85.

The projected upper bound is: 109.36.

The projected lower bound is: 107.39.

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 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 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 60.9139. This is not an overbought or oversold reading. The last signal was a buy 8 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 37.77. 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 buy 9 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 -24. This is not a topping or bottoming area. The last signal was a buy 8 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 4 period(s) ago.

Rex Takasugi – TD Profile

FOREX JPY= closed down -0.120 at 108.430. Volume was 13% below average (neutral) and Bollinger Bands were 9% wider than normal.

Open High Low Close Volume___
108.530 108.670 108.050 108.430 78,427

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

Moving Averages: 10-period 50-period 200-period
Close: 108.43 110.13 111.20
Volatility: 3 6 7
Volume: 87,764 87,992 99,859

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 2.5% 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 31 periods.

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