Yen Crosses: No Clear Consensus

The EURJPY should continue higher over the next several weeks and maybe longer.  There are 2 bullish counts.  One treats the decline from the 168.94 top as a completed A-B-C correction (truncated wave C).  The other treats the decline as a triangle with wave E ending at 158.60.  In both cases, the EURJPY should exceed 169.44 near term in order to complete a small 5th wave.

As long as 219.30 is intact, we are treating the advance from 192.60 as a corrective 4th wave.  Within the advance, the rally from 199.79 would equal the 192.60-208.94 rally at 216.13.  A rally to there would potentially complete an A-B-C correction from the low.

The big picture focus remains on the A-B-C advance from the 2000 low at 58.82.  Wave C would equal wave A (arithmetically) at 112.27 but waves A and C do not have to be equal.  The advance has already satisfied minimum expectations and a long time support line has acted as resistance since December 2007.  A break above this line argues for an extension towards 112.

There is no change to the bearish outlook for the CADJPY.  “Price below 109.62 keeps the series of lower highs (and lower lows) intact; which is the definition of a bear market.    The 200 day SMA is at 108.29 and should provide resistance if reached.  A drop below the trendline from the March low would inspire confidence in the longer term bearish bias.”  Price has fallen below the line and is sitting right at it now.  Watch for a bearish break.

We wrote last week that “the rally from 88.17-101.09 is in 5 waves and is either a 1st wave or A wave.  Therefore, wave 2 or B will begin very soon and bring the AUDJPY back to at least 96.15 (former 4th wave).”  That decline is underway now.

Either a triangle or flat is unfolding from the July 2007 top.  If a triangle is unfolding, then wave D is probably underway now to around 88.  If a flat is unfolding, then wave B of that flat is probably underway now and will exceed 91.42 in the next few months.


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TREND ANALYSIS is based on a rolling pivot model.  LONG TERM TREND is determined by the last 3 months of price data (high, low, close).  SHORT TERM TREND is determined by the last 4 weeks of price data (high, low, close).  R3, R2, R1, PL, PH, S1, S2, and S3 are provided to aid in identifying entries and exits.  These are objective measures and our subjective analysis (STRATEGY) may differ. 

SCHEDULE

Monday: EURGBP, EURCHF, EURCAD, EURAUD, EURNZD

Tuesday: EURJPY, GBPJPY, CHFJPY, CADJPY, AUDJPY, NZDJPY

Wednesday: GBPCHF, GBPCAD, GBPAUD, GBPNZD

Thursday: AUDCHF, AUDCAD, AUDNZD