There is little doubt that the Yen crosses are headed lower in the coming weeks and months. The best strategy then is to sell rallies, which are underway now. We have identified where the corrective advances are likely to end.
The drop from 167.64 can be viewed as a series of 1st and 2nd waves (following a major truncated 5th wave). The most recent 2nd wave is picture perfect as wave c and a are equal. The implications are that the EURJPY is entering a 3rd of a 3rd wave decline; often the fastest part of the decline. Look for a top and reversal in the 158.02-159.31 zone (38.2-61.8% zone).
The GBPJPY appears to have traced out 5 waves down from the November high at 241.35. Where does this fit in the larger pattern? Here are some possibilities. The drop could be wave 3 in a 5 wave bear cycle from 251.10 or a C wave that completes an A-B-C drop from 251.10. Another possibility is that the decline from 241.35 is a C wave but is extending and will subdivide lower. The last scenario is what we favor subjectively, due to the individual patterns in the USDJPY and GBPUSD. Expect a corrective rally before the decline continues. Resistance begins at 207.30 (38.2%).
We still maintain that the CHFJPY has been in a triangle since the July top at 101.85. Triangles unfold in 5 waves (A-B-C-D-E). Wave E is probably underway now and could reach 97 or 96 before the bullish thrust from the triangle occurs. Another count is even more bullish and treats the rally to 100.72 and decline to 95.12 as waves 1 and 2 in a new bull cycle. Under this count, the CHFJPY would accelerate higher soon. To summarize, out 2 best counts are bullish for the coming weeks and maybe months.
We maintain that the CADJPY trend is towards lower prices. A 3rd wave or C wave is underway from 116.83. Wave 1 of that bear leg is complete at 101.82 and wave 2 is complete at 109.62 (as a complex W-X-Y correction). Wave 3 is underway now. Look for resistance in the 105.73-106.82 congestion zone.
A major top is in place (likely a multi-year top at 107.84). We view the drop from 107.84 to 92.99 as wave 1 in a 5 wave bear cycle. Wave 2 takes the form of an expanded flat and is probably complete at 100.49. The next bear leg will come under 90.10 and challenge 85.98. Resistance should be strong in the 97.90-98.60 zone.
The NZDJPY is not as clear as the AUDJPY but a case can be made for a similar outcome (bearish). The initial drop, from 97.74 to 74.25 could be wave A in a large A-B-C decline. Everything since has been wave B, which may be forming a triangle. If so, then expect wave d to finish a little lower before a rally in wave e gives way to the bear leg that challenges 74.25 and lower levels.
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[B] [B]TREND ANALYSIS[/B] is based on a rolling pivot model. LONG TERM TREND is determined by the last 3 months of price data (high, low, close). SHORT TERM TREND is determined by the last 4 weeks of price data (high, low, close). R3, R2, R1, PL, PH, S1, S2, and S3 are provided to aid in identifying entries and exits. These are objective measures and our subjective analysis (STRATEGY) may differ.
[B]SCHEDULE[/B]
Monday: EURJPY, GBPJPY, CHFJPY, CADJPY, AUDJPY, NZDJPY
Tuesday: EURGBP, EURCHF, EURCAD, EURAUD, EURNZD
Wednesday: GBPCHF, GBPCAD, GBPAUD, GBPNZD
Thursday: AUDCHF, AUDCAD, AUDNZD
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