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I wrote last week that “the next drop likely extends into the 130’s.”  The EURJPY has reached the 100% extension of the 170-146.98 decline at 135.61.  This level is just above the 38.2% of 88.87-170 at 132.70, which is the center of a former multi-year congestion area.  This is a level that could produce a significant bounce. 

I wrote last week that “I favor longer term weakness to complete wave C of Y within a combination correction from the mentioned 251.  One reason to favor such as count is that an RSI extreme was registered with the low at 184.46.  RSI (and any momentum indicator) extremes rarely occur at the same exact time as the price extreme.  Bottoms (as well as tops) are usually marked by divergence.”  The 100% extension of wave W is at 165.47 and is a potential objective.  Be aware that divergence with RSI on the daily does now exist so there is potential for a bottom of some degree to form.

Repeated commentary for months has been that “the weekly chart shows the rally from the 2000 low as an A-B-C advance.  Wave C is a diagonal, which should be fully retraced.  Therefore, the bearish target is 78.88.”  The CHFJPY is well on its way to the objective.  Near term, strength should face resistance from former support at 92.94.

The break below 95.66 has led to a test of a support line from 1995.  One would expect some support at such a significant support line.  Potential resistance is at 94.23.  A rally to there would present an opportunity to align for a break of the long term support line and test of lower levels.

I wrote last week that “the long term AUDJPY target is not until 74.15.  This is the June 2004 low.  I have designated this as a target because the rally from there can be treated as an ending diagonal (similar to CHFJPY).  Diagonals are usually rapidly retraced.”  74.15 ended up being conservative!  The AUDJPY has collapsed like a wet taco and finds itself close to the 2002 low of 62.27.  An impulse is likely underway from the top and the decline should end at all-time lows.  However, a larger 4th wave correction probably begins soon.

The NZDJPY has also continued lower, reaching (and dropping below) the 50% of the advance from the 2000 low.  The 61.8% at 55.46 may provide support.  Expect a bounce soon from what will probably be a spike low.

Jamie Saettele writes Forex Technicals: The Day Ahead, Monday-Thursday (published 6-7 pm EST), 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.