Yen Crosses: Signs of Reversals

-EURJPY breaks below channel support
-38.2% Fibonacci contains GBPJPY
-CHFJPY and AUDJPY reverse from top of channels

Euro / Japanese Yen[/B]

I wrote last week that “the complex correction from 113.59 may be complete. Dropping below the channel line that contained wave Y would suggest that a top is in place. So far, the 200 day SMA has held. Risk of a sharp decline is high.” The EURJPY closed beneath the channel yesterday and has spent today’s below the channel as well. Price ideally remains below 134.36 on its way lower. Resistance is 132.10/65 (Fibonacci).

British Pound / Japanese Yen[/B]

The GBPJPY advance from 118.79 is viewed as corrective. Specifically, the advance is a 4th wave and may be complete at 151.60, which is roughly the 38.2% of the decline from 215.98 at 149.27 (on a closing basis, the high is 149.21). Risk of a sharp decline is high. A rally above 151.60 would give scope to the 50% retracement at 160.18.

Swiss Franc / Japanese Yen[/B]

A picture perfect flat has been unfolding since the low at 74.66. RSI divergence at the recent high along with the indicator turning down and the 200 day SMA holding as resistance favors bears. Price ideally stays below 88.71. 87.35/65 is short term resistance.

Canadian Dollar / Japanese Yen[/B]

I mentioned the long term bearish implications last week; “the advance from the all time low (57.88 in 1995) is in 3 waves (corrective). The suggestion is that the CADJPY should decline to an all-time low before a bottom is in place.” On the weekly, price remains within the Elliott channel, which is just above current price. I favor a top forming not far from 83.

Australian Dollar / Japanese Yen[/B]

Last I wrote last week that “the pair has rolled over just shy of the 200 day SMA. I am looking for a top (one may be in place now).” A new high was registered yesterday at 73.54, the exact level of the 200 day SMA and the top of a channel that has held since early January. Although I can not confirm a top, I favor the downside at this point.

New Zealand Dollar / Japanese Yen[/B]

In order to get a better grasp on the NZDJPY long term potential, I zoomed out to look at the weekly chart. The most important observation is that the 2000-2007 advance is in 11 waves, which is corrective (triple zigzag to be specific). This means that the decline that began in 2007 should end below 41.94. A top may be in place at 60.40 (200 day SMA is at 60.20 today). If price exceeds 60.40, then there is potential resistance from the November high at 61.61.

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.

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