USD/JPY (JPY=X) capped at 110.80/90 post FOMC as being the descending channel’s resistance line

USD/JPY (JPY=X) capped at 110.80/90 post FOMC as being the descending channel’s resistance line

USD/JPY (JPY=X) capped at 110.80/90 post FOMC as being the descending channel’s resistance line

On paper a hawkish Fed should be bullish for the USD/JPY. Rising interest rates should widen the spread between U.S. Government Bonds and Japanese Government Bonds, making the U.S. Dollar a more attractive investment.

The Dollar/Yen reached its highest level since May 22 early Wednesday ahead of a Federal Reserve Monetary Policy meeting that could offer clues on the number and pace of future U.S. rate hikes later this year.

At 0949 GMT, the USD/JPY is trading 110.631, up 0.257 or +0.22%.

The Forex pair is also being supported by increased demand for higher risk assets and expectations of another dovish monetary policy statement by the Bank of Japan on Friday.

Despite the bullish outlook for the USD/JPY, there are still some traders who believe gains could be limited if emerging market turmoil begins to escalate. If this does occur then the Dollar/Yen rally could be stopped in its tracks by increased demand for safe haven assets.

Additionally, there were no reports from Japan on Wednesday. In the U.S. Producer Price Inflation is expected to come in at 0.3% and Core PPI at 0.2%.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 111.56.

The projected lower bound is: 109.19.

The projected closing price is: 110.38.

Candlesticks

During the past 10 bars, there have been 5 white candles and 4 black candles for a net of 1 white candles. During the past 50 bars, there have been 25 white candles and 24 black candles for a net of 1 white 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 74.8929. This is not an overbought or oversold reading. 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 58.84. 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 16 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 105.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 9 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 3 period(s) ago.

Rex Takasugi – TD Profile

FOREX JPY= closed unchanged at 110.320. Volume was 97% below average (consolidating) and Bollinger Bands were 17% narrower than normal.

Open High Low Close Volume___
110.320 110.370 110.290 110.320 3,102

Technical Outlook
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 109.95 109.11 110.21
Volatility: 6 7 8
Volume: 89,130 98,909 105,088

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 downward trend. Volatility is relatively normal 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 12 periods.

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