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Japanese Yen Technical Analysis: USD/JPY, CHF/JPY. Is the Yen Trapped for the Year?

Japanese Yen Technical Analysis: USD/JPY, CHF/JPY. Is the Yen Trapped for the Year?

Daniel McCarthy, Strategist

Japanese Yen, USD/JPY, CHF/JPY - Talking Points

  • USD/JPY appears to be lacking directional momentum for now
  • Bollinger Band indicators might provide clues for CHF/JPY moves
  • JPY crosses remain inside recent ranges. Will a Yen trend emerge?

USD/JPY – Technical Analysis

USD/JPY continues to move sideways just below a 4.5 -year high. The March 2017 peak of 115.505 and the recent high at 115.524 may offer resistance.

Since early October, USD/JPY has been contained within a 112.533 – 115.524 range. More recently, the immediate range has narrowed to 113.142 – 114.276. These levels might provide support and resistance respectively.

This consolidation phase is illustrated by the convergence of all the short and medium term simple moving averages (SMA).

The 10, 14, 21, 34 and 55-day SMAs are all clustered between 113.607 and 113.808. A break away from this zone that lasts more than a week could see momentum evolve in that direction.

Longer term momentum appears to be maintaining a bullish perspective for now. The 100 and 200-day SMAs remain below the price with positive gradients.

The 100 and 200-day SMAs coincide with pivot points near 112.079 and 110.802 respectively. These SMAs may add to these support levels.

On the downside, support could be at the previous lows and pivot points of 112.533, 112.079, 110.802, 109.113 and 108.723.

USD/JPY CHART

Chart created in TradingView

CHF/JPY TECHNICAL ANALYSIS

CHF/JPY has spent over a month in the 122.140 – 123.955 range as it moved sideways. These levels may provide support and resistance respectively.

Historically, this currency pairs has tendency to do this before a breakout creates a new trend. It should be noted though that past performance is not indicative of future results.

Like many other currency pairs of late, CHF/JPY price action has seen volatility reduce significantly going into the holiday season. This is shown by the 21-day SMA based Bollinger Bands reducing in width over the last couple of weeks.

As well as the the absolute levels of the recent range, these Bollinger Bands might be worth paying attention to for an indication of a potential breakout.

Resistance could be offered at the previous highs of 124.497 and 125.515. On the downside, support may lie at a pivot point of 121.211 or at the previous lows of 118.938 and 117.545.

CHF/JPY CHART

--- 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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