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Yen Crosses Take a Dive as EURJPY Trades to 12 Year Low

Yen Crosses Take a Dive as EURJPY Trades to 12 Year Low

2012-05-31 19:56:00
Jamie Saettele, CMT, Sr. Technical Strategist
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New Zealand Dollar / Japanese Yen

Weekly Bars

Yen_Crosses_Take_a_Dive_as_EURJPY_Trades_to_12_Year_Low_body_nzdjpy.png, Yen Crosses Take a Dive as EURJPY Trades to 12 Year Low

Prepared by Jamie Saettele, CMT

The NZDJPY has dropped into a trendline that extends off of the March 2011 and November 2011 lows. Downside levels of interest from here on a break are the December 2011 and November 2011 lows at 5824 and 5702. Strength off of this level encounters resistance at 6010/20, then 6080 and 6150. Despite the presence of the trendline, I wouldn’t do anything here. Rather, I’d favor longs below 5700 (for a bounce) and shorts above 6000 (for continuation).

Australian Dollar / Japanese Yen

Weekly Bars

Yen_Crosses_Take_a_Dive_as_EURJPY_Trades_to_12_Year_Low_body_audjpy.png, Yen Crosses Take a Dive as EURJPY Trades to 12 Year Low

Prepared by Jamie Saettele, CMT

The AUDJPY has sliced through the December low of 7698 and is nearing the November low of 7477. The more important levels are the 2010 and 2011 lows at 7185 and 7204. One can’t help but notice the 2 year topping pattern that would be confirmed on a drop under these levels. A full scale breakdown seems likely but shorting at these level leaves one vulnerable to a sharp drawdown in the event of a pullback. 7755/75 is near term resistance but a sharper pullback above 7865 and into 7900 would present a short opportunity. Like the other Yen crosses, I do not like longs or shorts at the current level. Rather, I would align with the short side at higher levels (above 7900) or get long on a panic decline.

Euro / Japanese Yen

Daily Bars

Yen_Crosses_Take_a_Dive_as_EURJPY_Trades_to_12_Year_Low_body_eurjpy.png, Yen Crosses Take a Dive as EURJPY Trades to 12 Year Low

Prepared by Jamie Saettele, CMT

The EURJPY has dropped to its lowest level since December 2000 and the record low isn’t far off at 8894. It’s worth noting that the January low coincides with the 161.8% extension of the decline from March. Now that the January low has been taken out, perhaps price can manage a pullback back into 9800. 9805/40 is resistance and a level to attempt shorts against 10020. The former base channel is resistance.

British Pound / Japanese Yen

Daily Bars

Yen_Crosses_Take_a_Dive_as_EURJPY_Trades_to_12_Year_Low_body_gbpjpy.png, Yen Crosses Take a Dive as EURJPY Trades to 12 Year Low

Prepared by Jamie Saettele, CMT

The GBPJPY has shed over 400 pips in the last 2 days from high to low. The latest drop this morning has a panic feeling to it and a snapback rally to 12260 would present an opportunity to get short again against 12510 for an assault on 11960 and maybe 11727.

--- Written by Jamie Saettele, CMT, Senior Technical Strategist for DailyFX.com

To contact Jamie e-mail jsaettele@dailyfx.com. Follow me on Twitter @JamieSaettele

To be added to Jamie’s e-mail distribution list, send an e-mail with subject line "Distribution List" to jsaettele@dailyfx.com

Jamie is the author of Sentiment in the Forex Market.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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