The origins of the 5 wave declines in the Yen crosses that began in April remain intact. As such, the forecasts remain bearish. Remember, the long term trends in these crosses are down and recent rallies are viewed as corrections.
[B]
Euro / Japanese Yen[/B]
Right now, it’s a ‘wait and see’ game regarding the EURJPY. The decline to 124.37 was in 5 waves, indicating that the larger downtrend has most likely returned. An expected countertrend rally ended following 3 waves (at 134.86). The wave principle teaches us that the 5 wave moves are with the larger trend and that 3 wave moves serve as corrections. The minimum objective is below 124.37 and the bearish forecast is intact as long as price is below 134.86. Much greater bearish potential exists, possibly below 112.00 in the months ahead. A small degree correction may be complete just shy of 132.00.
[B]
British Pound / Japanese Yen[/B]
The GBPJPY pattern is the exact same as the EURJPY pattern. The minimum objective is below 139.00 and the bearish forecast is valid as long as price is below 150.94.
[B]
Swiss Franc / Japanese Yen[/B]
The CHFJPY pattern is the exact same as the EURJPY. The minimum objective is below 82.66 and the bearish forecast is valid as long as price is below 89.50. A small degree correction may be complete near 87.00.
[B]
Canadian Dollar / Japanese Yen[/B]
The CADJPY has spent the last week trading close to its 200 day SMA. The overlapping nature of the rally from the January low (68.36) strongly suggests that the rally is corrective and will be therefore be fully retraced (eventually). The corrective character of the rally and the fact that price reversed from former resistance (circled) suggests that we seriously consider the top at 85.96 as significant.
[B]
Australian Dollar / Japanese Yen[/B]
The AUDJPY rally from the October 2008 low can be classified as a flat (flats have subwaves 3-3-5). Wave C is in 5 waves, which satisfies structural requirements for the end of the rally. The long term objective is below 55.00. Staying below 76.20 keeps the bearish count on track.
[B]
New Zealand Dollar / Japanese Yen[/B]
The NZDJPY reversed right at the origin of its 5 wave decline. The rally was relentless and expanded into a complex correction. The minimum objective is below 52.89 and staying below 60.40 keeps the bearish outlook on track. Looking out a bit further, the drop from 60.40 may eventually extend below 44.19.
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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