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Japanese Yen Crosses.

Summary: Views of weekly charts make it clear that long term declines are far from over in the Yen crosses.

Views of weekly charts make it clear that long term declines are far from over in the Yen crosses. Euro / Japanese Yen Since the double top occured in June at 139.17, the EURJPY has traded in a wide range (approx. 139-127). The latest test of the range high failed and the price is below the midpoint of its 21 day range. Favor the downside but beware of potential support from a Fibonacci extension at 129.50. Additional weakness would expose the bottom of the range / 200 day SMA near 127.00. Also of note is that price action since March has carved out a potential head and shoulders top but a drop below 124.37 would be required in order to eliminate a bullish triangle count. Bottom line is that the EURJPY has had a nice run since the beginning of the year and the triple top is resistance to additional gains. 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. The double top is near the 50% retracement of the decline from 2.1598 and weekly slow stochastics has declines from above 80. Swiss Franc / Japanese Yen The CHFJPY is in the same position as the EURJPY. A potential head and shoulders top is evident but so is a bullish triangle. A drop below 87.15 would expose 86.50. Looking much further out, the rally from the 2000 low is in 3 waves and the sharp decline from 105.17 is an impulse. A number of patterns could be unfolding but the minimum target regardless of the pattern is below 74.66. Canadian Dollar / Japanese Yen The CADJPY looks nearly identical to the GBPJPY on the daily. A choppy rally from January may be over following a double top in early August / test of a former support line (as resistance). As is the case with other Yen pairs, the rally that preceded the sharp decline was in 3 waves - so it is not likely that the bear is over (a new all-time low should be registered before the decline is complete). Australian Dollar / Japanese Yen The AUDJPY rally reversed at the 61.8% of the decline from 104.55. This combined with divergent weekly and daily momentum studies is bearish. A support line is being put to the test right now and a drop below exposes 70.75. New Zealand Dollar / Japanese Yen The recent NZDJPY reversal occurred at the 38.2% retracement of the 97.86-44.19 decline. Again, divergence with momentum studies warns of a reversal. 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). He is the author of Sentiment in the Forex Market. Please send comments about this report to

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Publication:Mena Report
Date:Sep 3, 2009
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