JPY Crosses Maintain Upside Bias
CADJPY
CHFJPY
NZDJPY
Commentary – The CADJPY has broken through the 118.20 high from July, indicating that the topping process is still underway. 119.32 is the 161.8% extension of 103.38-111.30/106.50. Treating the 103.38-111.30 rally as wave 1 within a 5 wave bull cycle means that the end of the recent rally is wave 3 (wave 3 is often 1.618 x wave 1). The correction from 119.51 is either wave iv of 3 or the beginning of larger wave 4. In summary, the CADJPY appears to have some upside potential left (maybe for a test of 120.00).
Strategy – Flat
Commentary – We wrote last week to look for “the CHFJPY rally reversed stalled and reversed just north of 99.00. It is our contention that an A-B-C correction from 91.15 is complete at 99.28 (with wave v of C as an ending diagonal). This completes larger wave B in what is either a triangle or flat that is forming from the top (101.85). A bearish bias is warranted against 101.85.” There is no reason to change our outlook for a top and reversal since it appears as though the pair is rolling over.
Strategy – Bearish now, against 101.85, target TBD
Commentary – The rally to 89.95 most likely completed wave 3 in a 5 wave bull cycle from 76.93. Expectations are for a 4th wave correction to end near 87.17 before a rally to a new high in wave 5 (above 89.95). Wave 5 may lead to the end of a 3 wave correction from 74.25 (5 waves would complete wave C from 76.93). The 78.6% of 97.74-92.71 at 92.71 is a potential reversal point.
Strategy – Flat
