Yen Crosses Roll Over and Additional Bearish Potential Exists


CADJPY - Little has changed regarding our CADJPY analysis. The pair put in a momentum extreme with daily RSI on 5/3. This is common at the end of a third wave. As such, the weakness we are seeing today is most likely a 4th wave that will bring price down to the previous 4th wave (104.01-106.04 zone) before the CADJPY pushes higher (above 109.09) in a 5th wave. Risk is to the downside in the short term (until 106.04).

CHFJPY - We wrote last week that “the CHFJPY is rolling over from 9 year highs. Daily RSI has turned over (as has MACD) and we see bearish divergence at the recent high. A daily close below the 2 month support line, currently just below 98.00, would indicate additional bearish potential. The appearance of 5 waves higher from 94.27 argues for at least a correction (lower).” Price has declined to the trendline today, so look for a daily close under the line to signal a short opportunity.

NZDJPY - The NZDJPY appears to have broken lower from a small descending triangle. Daily RSI turning over from above 70, along with bearish divergence, favors the downside. The entire rally from 82.56 could be an extended 5th wave, in which case we would expect price to decline all the way back to 82.56. Risk is well-defined and small at the 4/18 high of 89.06.