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The Yen crosses may have completed corrective rallies last week.  If so, then the pairs are headed to new lows.

Last week, I wrote that “the EURJPY fell in 5 waves from the July high at 170 and the rally from 147.50 is most likely a correction of that decline (I say most likely because there is the possibility that the drop from 170 completed a large expanded flat).  Expect resistance near current price (wave 4 of one less degree).”  The EURJPY reversed immediately and the decline in an impulse (5 waves).  Rallies should prove corrective.  There is potential resistance around 151 and then 153.20 (61.8% of decline to 147.48).  The next drop likely extends into the 130’s.   

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.  Wave B of Y is most likely complete at 197.53.  There is potential resistance at 191.

This 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.  Near term, a small 2nd wave could be complete at 98.69.   

Until a break under 95.66 or above 107.23, the CADJPY is a range trading candidate.  Price remains below the 200 day SMA, which is sloping down.  This evidence favors bears.  There is no clear pattern currently.

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.  Near term, there are 5 waves down from 104.55 to 81.38 and the rally from 81.38 ended at the 38.2% of the decline and former 4th wave.  This is evidence that a secondary top may be in place (at 90.32).       

The drop below 67.77 satisfies minimum expectations for the end of the decline from 97.86 (which is wave C of an expanded flat).  However, the decline has more to go.  A drop below 67.19 is expected soon.

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.