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Yen Shows Signs of Life and Decent Opportunities

By , Sr. Technical Strategist
21 October 2011 20:02 GMT

Euro / Japanese Yen

300 Minute Bars

Crosses102111_body_eurjpy.png, Yen Shows Signs of Life and Decent Opportunities

Prepared by Jamie Saettele, CMT

The 5 wave EURJPY rally from the October low demands that we consider a longer term constructive view but the decline from 10769 and subsequent advance is best counted as waves a and b of a 3 wave (a-b-c) corrective decline. The implications are weakness into 10362 before a secondary low is formed. The line parallel to the potential neckline may also come into play at slightly lower levels.

British Pound / Japanese Yen

60 Minute Bars

Crosses102111_body_gbpjpy.png, Yen Shows Signs of Life and Decent Opportunities

Prepared by Jamie Saettele, CMT

The GBPJPY rally from 11696 is in 5 waves and therefore composes the first leg of a larger advance. The decline from 12263 and subsequent advance from 11998 is best counted as waves A and B of a corrective decline (the decline from 12263 is in 3 waves but so too is the rally from 11921). The implications are for a decline below 11998 in order to complete wave C. 11921/42 is support.

Australian Dollar / Japanese Yen

Daily Bars

Crosses102111_body_audjpy.png, Yen Shows Signs of Life and Decent Opportunities

Prepared by Jamie Saettele, CMT

The steep former support line has acted as resistance the last 6 trading days this week thus I am inclined to treat the pop above the trendline on the 17th as a false break. During bear trends, the largest rallies will tend to peak near 60. RSI peaked just above 60 last Friday. Coming under 7762 would shift focus to 7680 and 7590.

Canadian Dollar / Japanese Yen

DailyBars

Crosses102111_body_CADJpy.png, Yen Shows Signs of Life and Decent Opportunities

Prepared by Jamie Saettele, CMT

The CADJPY rally from 7215 viewed as corrective. Specifically, strength is viewed as wave 4 within the 5 wave decline from the April high. The Elliott channel wasn’t quite reached this week but price did reverse right at the base of the former 4th wave (circled). Look lower in a 5th wave towards 7215.

Euro / British Pound

Daily Bars

Crosses102111_body_eurgbp.png, Yen Shows Signs of Life and Decent Opportunities

Prepared by Jamie Saettele, CMT

After breaking through the trendline that extends off of the July and August highs, the EURGBP has failed to extend higher and the near term trend is best described as sideways. Still, as long as the year + support line holds (there were several false breaks), the longer term trend is viewed as constructive. Watch 8650 for support.

Euro / Australian Dollar

300 MinuteBars

Crosses102111_body_euraud.png, Yen Shows Signs of Life and Decent Opportunities

Prepared by Jamie Saettele, CMT

The EURAUD is trying to bottom. The 61.8% retracement, at 13407, is in the center of former congestion and the decline has stalled for several days now. Also, the decline from 14087 consists of 2 separate 3 wave declines (double zigzag correction) and daily RSI is holding above 40 (RSI range rules). I do favor a bottoming scenario but the market could have other ideas. If so, additional support comes in at 13317 and 13258.

Euro / Canadian Dollar

WeeklyBars

Crosses102111_body_eurcad.png, Yen Shows Signs of Life and Decent Opportunities

Prepared by Jamie Saettele, CMT

The EURCAD range, originally between 14128 and 13820, is tightening. A pop above 14128 would encounter trendline resistance and a decline below 13820 would encounter support from 13714 (former resistance). Structural clarity is lacking from the bigger picture.

--- Written by Jamie Saettele, CMT, Senior Technical Strategist for DailyFX.com

To contact Jamie e-mail jsaettele@dailyfx.com. Follow me on Twitter @JamieSaettele

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Jamie is the author of Sentiment in the Forex Market.

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21 October 2011 20:02 GMT