Yen Crosses: Declines Should Be Bought

EURJPY

Under the preferred count, a triangle is complete at 158.60 (view a daily to see waves A and B). The rally that followed is in 5 waves but is small relative to the triangle, making it likely that the advance is the first wave of the terminal thrust. A bullish bias is warranted against 158.60 but with 5 waves up from there, the EURJPY should correct lower. Expect support at 165.00.

GBPJPY

As long as 219.30 is intact, we are treating the advance from 192.60 as a corrective 4th wave. Within the advance, the rally from 199.79 would equal the 192.60-208.94 rally at 216.13.

CHFJPY

The big picture focus remains on the A-B-C advance from the 2000 low at 58.82. Wave C would equal wave A (arithmetically) at 112.27 but waves A and C do not have to be equal. The advance has already satisfied minimum expectations and a long time support line has acted as resistance since December 2007. A break above this line argues for an extension towards 112. It is best to remain bullish against 98.27 and buy sharp pullbacks against there. Fibo support begins at 102.50 and extends to 100.87.

CADJPY

There is no change to the bearish outlook for the CADJPY. "Price below 109.62 keeps the series of lower highs (and lower lows) intact; which is the definition of a bear market. The 200 day SMA is at 108.29 and should provide resistance if reached. A drop below the trendline from the March low would inspire confidence in the longer term bearish bias." Price has fallen below the line so bears are in control. The CADJPY should remain below 107.10.

AUDJPY

The AUDJPY continues to advance but recent strength is probably a 5th wave (from 100.24). Expect a countertrend movement (correction lower) to begin following completion of wave 5 (which appears to have additional upside potential…psychological level at 105 is potential resistance). Support begins at 100.

NZDJPY

NZDJPY has gone nowhere in months so a sharp break is probably close to occurring. "Either a triangle or flat is unfolding from the July 2007 top. If a triangle is unfolding, then wave D is probably underway now to around 88. If a flat is unfolding, then wave B of that flat is probably underway now and will exceed 91.42 in the next few months." Still, the break could be lower given that the rally from 76.73 is not an impulse.

TREND ANALYSIS is based on a rolling pivot model. LONG TERM TREND is determined by the last 3 months of price data (high, low, close). SHORT TERM TREND is determined by the last 4 weeks of price data (high, low, close). R3, R2, R1, PL, PH, S1, S2, and S3 are provided to aid in identifying entries and exits. These are objective measures and our subjective analysis (STRATEGY) may differ.

DailyFX

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