-EURJPY and CHFJPY potential head and shoulders tops and triangles
-GBPJPY drops below support line
-AUDJPY and NZDJPY have the 'look' of tops
Euro / Japanese Yen
Since topping in June at 139.17, the EURJPY has traded in a wide range (approx. 139-127). The latest test of the range high failed and the price is below the midpoint of its 21 day range. Favor the downside but beware of potential support from a Fibonacci extension at 129.50. Additional weakness would expose the bottom of the range / 200 day SMA near 127.00.. Also of note is that price action since March has carved out a potential head and shoulders top but a drop below 124.37 would be required in order to eliminate the bearish triangle. Bottom line is that the EURJPY has had a spectacular run since the beginning of the year and the triple top is resistance to additional gains.
British Pound / Japanese Yen
There is little doubt that the rally from the January low is corrective. The advance is choppy and the waves unclear (lack of structural clarity signals itself that the pattern is corrective). Trendline support was broken in early July and the subsequent GBPJPY rally led to a piercing of the June high. Price is slipping below yet another support line now, which exposes the July low of 146.74.
Swiss Franc / Japanese Yen
The CHFJPY is in the same position as the EURJPY. Following a support line break, the pair rallied to test the underside of that line (former support becomes resistance). A potential head and shoulders top is evident but so is a bullish triangle. A drop below 87.15 would expose 86.50. Rallying through 90.61 would warn of a break from a bullish triangle.
Canadian Dollar / Japanese Yen
The CADJPY looks nearly identical to the GBPJPY. A choppy rally from January may be over following a double top in early August / test of the former support line (as resistance). The pair is in no man’s land right now - trading just below the middle of its 21 day range. A drop below 84.40 would expose potential Fibonacci support near 83.
Australian Dollar / Japanese Yen
The AUDJPY sheds some light on what may be going on. There is a clear 5 wave rally from the October 2008 low (see the bold lines) - 3 wave declines follow 5 wave rallies. RSI divergence at the recent high favors a downturn as well. If I am seeing this correctly, then the AUDJPY should retrace a portion of the advance from the October 2008 low. A potential target is 66.80 - which is the 4th wave of 2 less degrees.
New Zealand Dollar / Japanese Yen
The recent NZDJPY reversal occurred at the confluence of a former support line / 50% retracement of the 97.86-44.19 decline. RSI divergence at the top favors bears. Be wary of a sharp decline.
Jamie Saettele publishes Daily Technicals every weekday morning (930 am EST), COT analysis (published Monday mornings), technical analysis of currency crosses throughout the week (EUR on Tuesday, JPY on Wednesday, GBP on Thursday, AUD on Friday), and the DFX Trend Index every day after the NY close. He is also the author of Sentiment in the Forex Market.
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