Yen Crosses: Former Support is Now Resistance

Euro / Japanese Yen

Since topping in June at 139.17, the EURJPY has traded in a wide range (approx. 139-127).  The latest test of the range high failed (with help from a former support line turned resistance) and price has now dipped below the 55 day SMA (blue).  Favor the downside until at least the bottom of the range / 200 day SMA.  Also of note is that price action since March has carved out a potential head and shoulders top.     

British Pound / Japanese Yen

There is little doubt that the rally from the January low is corrective.  The advance is choppy and the waves unclear (lack of structural clarity signals itself that the pattern is corrective).  Trendline support was broken in early July and the subsequent GBPJPY rally led to a piercing of the June high.  RSI divergence at that high is bearish.  Favor the downside until at least the bottom of the range.  Under 146.74 would confirm a double top.  

Swiss Franc / Japanese Yen

The CHFJPY is in the same position as the EURJPY.  Following a support line break, the pair rallied to test the underside of that line (former support becomes resistance).  Favor weakness to the bottom of the range.  The potential head and shoulders top is visible here as well (left shoulder in April). 

Canadian Dollar / Japanese Yen

The CADJPY looks nearly identical to the GBPJPY.  A choppy rally from January may be over following a double top in early August / test of the former support line (as resistance).  Favor the downside to at least the bottom of the range below 80.

Australian Dollar / Japanese Yen

Same deal for the AUDJPY.  The year long rally may be over following a double top / test of the former support line (as resistance).  Favor the downside to at least the bottom of the range, which is just below 71.00.

New Zealand Dollar / Japanese Yen

The recent NZDJPY reversal occurred at the confluence of a former support line / 50% retracement of the 97.86-44.19 decline.  RSI divergence at the top favors bears.  Be wary of a sharp decline.  

Jamie Saettele publishes Daily Technicals every weekday morning (930 am EST), COT analysis (published Monday mornings), technical analysis of currency crosses throughout the week (EUR on Tuesday, JPY on Wednesday) and the DFX Trend Index every day after the NY close.  He is also the author of Sentiment in the Forex Market.  Follow his intraday market commentary at DailyFX Forex Stream.  Contact Jamie at jsaettele@dailyfx.com