Yen Crosses: Sizeable Corrections (Lower) Underway

EURJPY

We had been looking for "the EURJPY to exceed 169.44 near term in order to complete a small 5th wave." The pair exceeded this level early this week and at least a correction is underway now. There are still 2 counts that seem of equal probability but both suggest the same thing. The count where a truncated C wave ended at 151.71 suggests that the EURJPY just completed wave 1 of (3) and that price will remain above 158.60 and is on its way to 180. Fibo support in this case is in the 162.82-165.43 zone. The other count is that a triangle ended at 158.60 and that the rally from 158.60 is wave 1 of the terminal thrust. This count also calls for a rally and the potential support is the same. There will be a high probability EURJPY buy opportunity in the next few weeks against 158.60. Until then, the trend is down.

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. Weakness today puts forth the possibility that the 4th wave advance is done at 213.91.

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

We wrote last week that "the rally from 88.17-101.09 is in 5 waves and is either a 1st wave or A wave. Therefore, wave 2 or B will begin very soon and bring the AUDJPY back to at least 96.15 (former 4th wave)." That decline is underway now. Ideally, the AUDJPY comes all the way back to 96.13 (former 4th wave) before finding significant support.

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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