USD/JPY MA’s: Levels, Ranges, Targets

USD/JPY longer term averages from 2897 day to 4812 crossed above shorter averages from 1874 day to 2642. The longer term averages sit from 101.16 lows to 106.53 at the January 1, 1999 high and 4812 day average.

From USD/JPY’s close at 111.82, next supports are located at 111.74, 111.24 then 110.36 at the 1104 day and 109.47 at the 337 day. The 1279 day, 5 year average at 107.75 is crucial as this area begins many massive clusters of supports in the 106’s starting from 106.53 at the 4812 day, 106.21 at the 4688 day, 106.10 at the 4432 day and 106.04 at the 1359 day. The levels at 110.36 and 109.47 overall are most important as breaks here represents wholesale changes to USD/JPY.

The most vital breaks above are located at 112.79 and 113.22. USD/JPY is massively oversold from current 111.82 against all averages and becomes more oversold against further price drops.

The 18 year midpoint from 113.22 to 98.23 is located at 105.72 and coincides to the 4177 day average at 105.61. A break of 110.36 then the mid point becomes 104.29 and coincides perfectly to the 3923 average at 104.29. From 112.79 to 98.23 then the mid point factors to 105.51 and again confirms the most vital point overall at the 4177 average at 105.61.

Above from 113.22 to 111.24, the mid point factors to 112.23 and just short of the 112.79 break at the 594 day average. For perspective, the mid point from 112.79 to 111.24 is located at 112.01. At 112.79 will be USD/JPY’s toughest break and as well it sits at the upper 18 year range point.

The noted point to 111.74 is it represents a specially designed moving average and it coincides perfectly to market prices. The overall ranges for USD/JPY is found from 112.79 to 110.36. Most vital to the upside scenario is 111.74 as a hold at this interval then 112.79 contains a shot while a break of 111.74 then views 110.36.

As central banks restructured prices in currency and other associated markets, 24 hour ranges factored ahead become predictable. For Monday trade, USD/JPY will range from 111.26 lows to 112.91 highs. In the way of 112.91 is a break point at 112.79 and range point at 112.85. A range point in currency trading is far more vital than a trade able level and a target. The next vital break at 112.79 is protected while 111.74 is vulnerable.

Japanese Overnight Call Rates traded September 10 as of the last post at -0.046 or 0.954 and closed Friday at -0.021 or 0.979 for barely a 2 basis point difference.

While the BOJ remains committed to bond buying stimulus against its yield control policy to contain the 10-Year yield as well as negative interest rates, the proposed Consumption tax slated for October 2019 is a warning.

All past Japanese economic experiments failed as a result of an economic tax. In the 1980′ to 1990’s, the Sales tax impaired the recovery. In 2010 and 2011, the 10% Sales and 10% Dividend tax impaired the recovery. In 11 Japanese economic experiments since the 1940’s, the tax failed to see the economic experiment come to fruition.

The Japanese never met a tax they didn’t like and its the commonality to every experiment since the 1940’s and as well far back to the 1930’s when USD/JPY was pegged to GBP/JPY to gain access to London Gold markets. The 1980 to 1990’s experiments was most wild as USD/JPY was pegged to GDP and the money supply. Wild volatility was seen in USD/JPY as money supplies swung far and wide.

As a result, GDP for fiscal 2017 based on BOJ forecasts are slated for 1.5 to 1.8, then 1.1 to 1.5 for fiscal 2018 and 0.7 to 0.8 for fiscal 2019. Fiscal years for the BOJ are located in budgets years from April to April.

The overall problem to USD/JPY is its associated averages lack uniformity and certain averages are misplaced such as 109.47 and 113.22.

Following are averages and line ups then followed by comparison averages for September 10.

80 day = 111.24
Special average = 111.74
337 day = 109.47
Close – 111.82. Call Rate = -0.021 or 0.97
594 = 112.79
849 = 113.22
Close 111.82. Call Rate = -0.021 or 0.97
1104 = 110.36
1279 = 5Y = 107.75
1359 = 106.04
1616 = 101.68
1874 = 99.13
2131 = 98.23
2386 = 98.31
2562 = 10Y = 98.92
2642 = 99.50
2897 = 101.16
3153 = 102.27
3411 = 102.62
3590 = 14Y = 102.92
3668 = 103.21
3923 = 104.29
4177 = 105.61
4432 = 106.10
4688 = 106.21
4812 = 106.53 = January 1, 1999

September 10 Average line up

81 day average = 110.93
XXX = 110.29 = Special average
337 day = 109.16
595 = 113.29
850 = 112.92
1105 = 110.08
USD/JPY current close 107.82 Call Rate = -0.046 or 0.954
1279 = 5y = 107.10
1360 = 105.42
1616 = 101.20
1875 = 98.85
2132 = 98.05
2643 = 99.61
2897 = 101.17
3153 = 102.24
3412 = 102.61
3669 = 103.26
3924 = 104.37
4178 = 105.67
4432 = 106.07
4689 =106.26
4787 = 106.50 = Jan 1, 1999

The average for the current line up minus the 5, 10 and 14 year averages is 105.22 and 105.61. To include the 5, 10 and 14 then the averages drop to 104.97 and 104.95.
For September, the averages were 105.62 and 105.87 and included the 5 year average.

Brian Twomey, Inside the Currency Market, btwomey.com

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