Betting against the yen ranks high among currency traders. The yen was at its weakest level against the dollar in nearly four months on Tuesday and has slipped 4.75 per cent over the past 18 trading days. Positioning data shows traders selling, or shorting, the yen at levels not seen since the start of January.
Underlining this position, the BoJ on Friday stepped up its unconventional monetary policy, saying it would buy an unlimited amount of 10-year Japanese government bonds. It remains determined to keep 10-year JGB yields as close to zero as possible, thereby widening the spread in yields between Japan and other countries.
The Bank of Japan looks likely to be the only major central bank that will not raise its interest rates this year. This is one main reason why investors are staying away from the JPY.
Since the central banks’ gathering in Sintra two weeks ago, which sparked a bond sell-off in anticipation of a co-ordinated retreat from QE, G10 currencies have logged impressive gains against the yen. The Swedish krona has risen 5.4 per cent, the Canadian dollar 4.8 per cent and the euro 4.2 per cent.
The election of Donald Trump in November sparked the first phase of broad yen selling as investors anticipated a stronger US economy.
Now we are seeing yen weakness from another side, the rest of the world, as the yen comes up against the euro, the Canadian dollar, sterling and others.
More likely to influence the yen is Japanese politics. Next year sees a trio of calendar events — the end of BoJ governor Haruhiko Kuroda’s term of office in April, the finale of prime minister’s Shinzo Abe’s three-year term as Liberal Democratic party leader in the autumn, and a general election, which has to be held by the end of 2018.
Overall, the bias in prices is: Sideways.
Short term: Prices are stalling.
Intermediate term: Prices are ranging.
By the way, prices are vulnerable to a correction towards 112.34.
The projected upper bound is: 114.58.
The projected lower bound is: 111.05.
The projected closing price is: 112.81.
A white body occurred (because prices closed higher 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 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 20.5212. This is not an overbought or oversold reading. The last signal was a buy 0 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 54.04. 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 4 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 -56. This is not a topping or bottoming area. The last signal was a sell 3 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 sell 1 period(s) ago.
Rex Takasugi – TD Profile
FOREX JPY= closed up 0.320 at 112.820. Volume was 39% below average (neutral) and Bollinger Bands were 22% narrower than normal.
Open High Low Close Volume
112.490 112.860 112.300 112.820 69,104
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 113.33 111.87 111.79
Volatility: 7 10 12
Volume: 103,848 112,050 124,900
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 0.9% above its 200-period moving average and is in an upward trend. Volatility is low 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 14 periods.
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