currency crosses

Japanese Yen Crosses: Rallies May be Temporary

Wednesday, 18 February 2009 19:10:59 GMT  |  Jamie Saettele, Senior Currency Strategist

-EURJPY above 120 would expose 123.50
-GBPJPY bearish short term structure
-CADJPY bearish below 75.62
-AUDJPY large range

Euro / Japanese Yen

Given the corrective nature of the advance from 113.59 (in 3 waves), it is likely that the next leg of the long term bear is underway.  This is the favored long term view as long as price is below that level.  Bolstering the long term bearish prospects is the structure of the decline from 131.08, which is impulsive (5 waves).  Near term, a push above 120.06 would expose the 61.8% of the decline from 131.08; at 123.45.

British Pound / Japanese Yen

The rally from 118.79 to 136.90 is in 3 waves and the 2 bull legs are close to equal.  Equality among waves is a sign that the move is corrective.  The decline from 137.47 is an impulse and could be the beginning of the next bear leg.  I wrote last week that “a corrective advance is due.  Resistance is in the 133-134 zone.”  The GBPJPY is at resistance now from the 61.8% of 137.47-127.08 at 133.40.  

Swiss Franc / Japanese Yen

The CHFJPY pattern is the exact same as the EURJPY.  Staying below 97.09 keeps the trend down.  Resistance is in the 81.02-82.42 zone (50%-61.8% of drop from 87.09 and former congestion).    

Canadian Dollar / Japanese Yen

Similar to other Yen pairs, the CADJPY rally from 68.36 is in just 3 waves, suggesting that the trend remains down.  Bears are favored as long as price is below 75.80.  That level is reinforced by the 61.8% of the decline from 80349-68.36, at 75.62.  Coming below 72.41 would confirm a head and shoulders top as well.  A rally above 75.62 would shift the advantage to bulls.

Australian Dollar / Japanese Yen

Since the October 2008 low, the AUDJPY has been in a contracting range.  The pair could be stuck in a triangle, which would last for a few more months.  If a flat is underway, then the pair would exceed 70.58 prior to resumption of the downtrend. 

New Zealand Dollar / Japanese Yen

Near term, there is potential for the NZDJPY to exceed 49.96 before the downtrend resumes.  The rally from 44.19 counts well as an impulse and the drop from .4996 is in just 3 waves to this point.  Exceeding 49.96 would shift focus to 52.50, which is the 100% extension of the 44.19-49.96 advance.

 

 

Jamie Saettele writes Daily Technicals every weekday morning (9-10 am EST), COT analysis (published Monday mornings), and analysis of currency crosses throughout the week.  He is also the author of Sentiment in the Forex Market.

Contact him at jsaettele@dailyfx.com

Resources

• free demo account
• forex courses
• open an account
• forex stream
• free webinars