Yen Crosses Begin Next Bearish Wave


Commentary - Last week, we wrote to “look for weakness until 105.59/106.95 (61.8%-38.2% of 103.38-109.16) before another rally leg takes place to complete the correction from 103.38.” The CADJPY bottomed at 107.02 and the rally to 110.30 may have completed a zigzag correction from 103.38. As such, a bearish bias is warranted as long as price is below 110.30. Preferably, 109.76 remains intact as well. If the rally from 103.38 was only the first leg of a more complex correction, then potential support is at the 61.8% of 103.38-111.29 at 106.40.
Strategy - Bearish against 110.30, targets 106.60 and below 103.38

Commentary - The CHFJPY rally from 92.15 looks like the CADJPY rally from 103.38. The rally is corrective in nature as the pattern is a 3 wave advance. The break this morning of 95.89 suggests that a top is in place at 97.21. A short term head and shoulders pattern has also formed from the 8/23 high of 96.94. If the rally from 92.15-97.21 was just the first leg of a more complex correction, then potential support is the 61.8% of that rally at 94.08. Either way, the near term trend is down. The bearish scenario is best served by 96.65 resistance remaining intact.
Strategy - Bearish against 97.21, targets 94.20 and below 92.15

Commentary - Surprise surprise, the NZDJPY pattern looks just like all the other Yen pairs. The 3 wave rally from 74.25 has bearish implications and the break of 81.22 this morning makes it likely that a top is in place at 84.85. We favor price coming under 74.25 while 84.85 remains intact (preferably 82.61 remains intact).
Strategy - Bearish against 84.85, targets below 74.25