Terminal thrusts from triangles in the EURJPY, CHFJPY, AUDJPY, and NZDJPY may be complete. There is head and shoulders pattern forming in the GBPJPY and the CADJPY is nearing the bottom of its channel that has held since January.
Euro / Japanese Yen
139.17 may have been the top and the count above shows why. The rally from 112.04 can be counted as an impulse in the C wave position (wave iv of the rally is a triangle). It is noteworthy that the rally stalled in the center of the former 4th wave’s price area. This is common. A breach of 139.17 would suggest an extended 5th wave and expose the 61.8% of the decline from 170 at 148.50.
British Pound / Japanese Yen
Fitting with the top and reversal theme, a potential head and shoulders top is visible in the GBPJPY. 154.87 is the neckline and the pattern would be confirmed on a break of that level.
Swiss Franc / Japanese Yen
There is clear momentum (RSI) divergence with CHFJPY and structural evidence of a top (thrust from triangle into a top). If this count is correct, then an important top is in place at 91.56.
Canadian Dollar / Japanese Yen
Last week, I wrote that “there is no evidence that a top is in place but there are many warning signs. Structurally, a 4th wave is expected to come to an end soon and the area of a small degree 4th wave (from October 2008) stretches to 91.00. The pair is trading at the top of a channel and the 50% of the decline from 107.23. Coming under 86.02 would suggest that at top is in place.” The CADJPY did come below there and price is close to testing the channel that has contained the rally from the early 2009 low. A daily close below the channel would be stronger evidence of a top.
Australian Dollar / Japanese Yen
The AUDJPY drop from 104.55 was a clear 5 wave affair (no labels) and the advance from 55 is corrective. Price has tested the 50% retracement of the larger decline and divergence with RSI at the top is bearish. The drop below the line extended from the 4/28 and 5/18 lows suggests that a top is in place.
New Zealand Dollar / Japanese Yen
RSI divergence warns of a top as well. Failure to remain below 63.43 would expose the next level of potential resistance from the 50% of the decline from 97.86 at 65.76. A daily close below the line extended from the 4/28 and 5/18 lows would suggest that a top is in place (NZDJPY lagging AUDJPY).
[I]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.
Please send comments about this report to <[email protected]>[/I]