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EUR/JPY, GBP/JPY, CHF/JPY: Will Japanese Yen Weakening Resume Against European Currencies?

EUR/JPY, GBP/JPY, CHF/JPY: Will Japanese Yen Weakening Resume Against European Currencies?

Daniel McCarthy,

EUR/JPY, GBP/JPY, CHF/JPY - Talking Points

  • The JPY weakening against EUR, GBP and CHF has stalled of late
  • Sideways trading has set up some break-out points to watch
  • Have the Europe-Yen crosses peaked for now or will the trend resume?

EUR/JPY Technical Analysis

Since the low seen in May 2020, EUR/JPY consistently found support on its way to a high of 134.55 in June this year. Shortly after that, the cross broke below the up-trend line and has moved down. A key support level at 128.29 was broken but prices failed to follow through. This established a new low/support level at 127.93 which, at the time, was the 260-day simple moving average (SMA). The 260-day SMA is now a support at 128.02.

On the topside, there is resistance at the most recent high of 130.56 and then the previous high of 134.55. The 55-day SMA resistance currently comes in at 130.25.

While some up-trend support levels have been breached, these are not convincing breaks and a sustained move below 127.90 is needed to confirm them. Looking upward, it looks like there’s a lot of wood to chop to make a new high and resume the up-trend.

EUR/JPY, GBP/JPY, CHF/JPY: Will Japanese Yen Weakening Resume Against European Currencies?

Chart Created in TradingView

GBP/JPY Technical Analysis

The shape of the GBP/JPY chart is similar to EUR/JPY, but there are some key differences. Most notably, the low seen in July did not breach the previous one seen in March, allowing for a Head and Shoulders technical set-up. This keeps the neckline at 148.53 intact and a key support. Taking the distance of the head (156.07) to the neckline (148.53), a break below 148.50 may open a move of similar magnitude toward 141.00. With that in mind, past performance is not indicative of future results. Additionally, there is a long-term support level at 142.71

On the topside, resistance comes in at the 55-day SMA of 152.31 and then the previous high at 153.44. Beyond that, the overall high of the year at 156.07 is the next significant resistance level.

EUR/JPY, GBP/JPY, CHF/JPY: Will Japanese Yen Weakening Resume Against European Currencies?

Chart Created in TradingView

CHF/JPY Technical Analysis

Looking at the CHF/JPY chart, a stand-out characteristic of the cross is that it has a tendency to trade sideways on a regular basis. This range trading trait is not surprising given the similarities in the underlying currencies. The current levels to watch for a break-out are 118.65 to the downside and 121.21 on the topside.

EUR/JPY, GBP/JPY, CHF/JPY: Will Japanese Yen Weakening Resume Against European Currencies?

Chart Created in TradingView

--- Written by Daniel McCarthy, Strategist for DailyFX.com

To contact Daniel, use the comments section below or @DanMcCathyFX on Twitter

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

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