Yen Crosses Getting Tired but No Sign of Reversal Yet


[B]Commentary -[/B] The psycholigcal backdrop that we discussed last week remains conducive to a top. A top (of which degree we are unsure) is either in place at 118.20 or a triangle is unfolding from 118.20. Of a triangle is unfolding, then we will see additional consolidation before a thrust to a new high (above 118.20). This thrust should prove terminal though and we would thene expect a top and reversal. Coming under 114.48 negates the triangle and indicates additional bearish potential. The triangle interpretation is shown on the chart above.
[B]Strategy -[/B] Bearish on break of 114.48, against 117.29, target TBD

[B]Commentary -[/B] We wrote last week that “a measured objective for the end of the rally is the 61.8% extension of waves 1 through 3, which is at 102.66. Wave 5 would equal wave 1 at 102.62, so this is a level to watch closely.” A top may be in place at 101.85. A drop below 99.90 would make the decline from 101.85 a 5 wave decline. This means that at least one more leg lower would be expected. Potential support is at 99.44 and 97.69.
[B]Strategy -[/B] Flat

[B]Commentary -[/B] We wrote last week that “similar to the other Yen crosses, the rally from 90.47 may be an ending diagonal. These patterns usually result in a sharp reversal. Still, a new high is expected (above 96.94).” NZDJPY has registered a new high, at 97.74 today. The ending diagonal formation remains a possibility but only a break below 96.07 indicates additional bearish potential. Potential trendline resistance is at 99.00 but quadruple RSI divergence (on 240 min chart) suggests that the rally is tired.
[B]Strategy -[/B] Sell break of 96.07, against swing high, target TBD