Euro at Risk for Further Declines Against Japanese Yen

The Euro/Japanese Yen pair continues to fail at key Fibonacci resistance, and medium-term momentum favors further EUR/JPY weakness. The 131.00 level represents the 61.8 percent Fibonacci retracement of the 141.80-113.60 decline, and a triple top at said level tells us that bears maintain control of the risk-sensitive pair. Short-term targets become recent spike-lows near 124.00, while a break above 131.00 would clearly negate our bearish bias.

The British Pound continues its breathtaking declines against the Japanese Yen, and the fact that the currency continues to teeter near record-lows gives us little reason to believe that it may see noteworthy rallies through the near term. 129.00 represents the trough set in 1995 before the GBP/JPY went on a multi-year recovery, but the sheer strength of the 2007-2008 downtrend gives us comparatively little confidence to expect similar price action ahead. As such, we remain medium to long-term bears, while short-term price action is substantially less clear.

The Swiss Franc has hit a clear roadblock against the Japanese Yen, failing at a multi-month falling trendline and key Fibonacci retracement level. Recent peaks near 87.00 coincide with the confluence of the August-December downtrend and the 50.0 percent Fibonacci retracement of the 98.70-74.60 move. Continued failure at said level leaves our bias firmly to the downside, and subsequent price targets become recent spike-lows near the 80.00 mark. A break above 86.70 would negate our bearish bias.

The Canadian Dollar remains dangerously close to fresh multi-decade lows against the Japanese Yen, but recent price action suggests that the CAD/JPY is likely to remain in consolidation through short-term trading. The pair is currently stuck in sideways price action through illiquid year-end trade, and the absence of a break in either direction leaves our short-term bias effectively neutral. Suffice to say, however, overwhelmingly bearish momentum suggests risks remain to the downside.

The Australian Dollar has recently broken out of its short-term wedge formation against the Japanese Yen, but extremely overbought oscillators suggests that a very short-term correction is likely. Next noteworthy resistance comes in at previous congestion near the 65.00 mark, while support can be found at the 62.50 mark. Our near-term bias remains bullish on a hold of the pair’s short-term rising trendline near 60.00.

The New Zealand Dollar trades near important resistance levels against the Japanese Yen, and short-term price action may dictate whether the NZD/JPY will continue its recent recovery. The 54.00 mark represents a makeshift double-top, and a failure here will keep the pair within its 47.80-54.00 range. Otherwise, a break higher would next target key Fibonacci resistance and previous spike-highs of 56.40.