Yen Crosses Ready to Fall off of a Cliff


Commentary - There is no change to the outlook for a top and reversal near current levels. 118.20 is critical to the bear case. The reason that we favor the bear seide rather than a break above 118.20 is that the decline from 118.20-103.38 counts better as a 5 wave decline rather than a correction (with an extended 5th wave). Also, the rally is still corrective, being in 3 waves.
Strategy - Bearish, against 118.20, target below 103.38

Commentary - We wrote last week to look for “a terminal thrust towards the 61.8% of 101.85-92.15 at 98.14 before the downtrend resumes. The 78.6% at 99.77 is also a possible reversal point. 99.77 seems more probable as that level is also the 100% extension of 92.15-97.21/94.67.” 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.
Strategy - Bearish now, against 101.85, target TBD

Commentary - We wrote last week that “the count is tracking well so continue to favor the upside for at least a rally through 85.98 and possibly a test of 87.53 or 88.77. The form of the NZDJPY is clear and suggests that one more push will lead to a top and reversal near one of the mentioned levels.” The pair did rallied to 88.85 yesterday (7 pips above our measured objective of 88.77) and with the appearance of 5 waves up from 76.93, wave C and therefore the entire A-B-C rally from 74.25 may be complete. There is no sign of a turn yet but the evidence is strong enough to take action.
Strategy - Flip from bullish to bearish, short term against 88.85 and long term against 97.74. ST target at 83.60 and LT target TBD