Japanese Yen Currency Pairs Elliott Wave Analysis – Looking Higher

As per Elliott Wave analysis, AUDJPY made a deep pullback in the last few months from 86.00 area, but this can be a contra-trend move if we consider that market came down with overlapping price action after previously completed five waves up. Such pullbacks are normal. What is very interesting now, is a bounce away from 78.44 support and current rise back to the upper side of a channel where breakout is expected to cause more bullish price action as higher degree wave B) can be finished.

AUDJPY Daily Elliott Wave Analysis Chart

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CADJPY came down to 85.30 support, back to the former wave four from where we can already see some bullish price action. In fact price is trying to break out of a downward corrective channel that can bring more gains ahead, especially if we consider that drop from 91.00 area is having a corrective look, thus it can be wave B so ideally higher degree wave C is in play.

CADJPY Daily Elliott Wave Analysis Chart

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Red Everywhere, Watch AUD/JPY for As a Guide

The known challenges to the markets, namely the spread of the Delta variant, rising inflation, and the Fed policy outlook have suddenly exploded into life. It’s all in timing some might say, which is especially true in trading.

The single Covid case in New Zealand set off alarm bells everywhere, with the Ardern government swiftly ordering a national lockdown due to its “zero Covid” strategy. Going hard and early instead of light and long has proven to have far less of an enduring economic impact. But the RBNZ was forced to delay its planned route to policy normalisation, even if it did surprise more hawkishly on its future rate projections.

Fed set to reduce the punchbowl

With global growth forecasts being re-rated on disappointing China data amid rising Delta variant cases, we’ve also heard from Fed officials who are now ready to taper before the end of this year. Sufficient progress has been made towards the inflation target and progress is being seen towards the FOMC’s employment goal.

Remember that the bumper July payrolls came after the Fed minutes, so a solid August report is probably good enough to announce a tapering framework potentially at the September meeting. With consensus veering towards a faster taper too, an end date around the middle of next year could be on the cards, paving the way for a rate rise by the end of 2022. This has certainly given the equity bulls some jitters, even if bond market consensus was spot on. Of course, increased volatility and Delta variant concerns may be a factor going forward.

Aussie’s perfect storm

Risk-taking is on the back burner for now, which means high beta commodity currencies like the Aussie are in a world of pain. The worst performing major this month, collapsing commodities, and plunging iron ore prices need to be added to the list of drivers hurting AUD. Similarly, the global bellwether copper has fallen every day this week until today and is now touching the 200-day moving average. This has pushed the RBA far down the list of major hawkish central banks, highlighted by their recent minutes which hinted at a much more dovish debate under the surface.

AUD/JPY global risk gauge

This currency pair is viewed as the best risk barometer and a metric for measuring broader sentiment is AUD/JPY, even if the historic positive correlation with US equity markets has decoupled since mid-June. The woes of the Aussie are well known, while the yen has also been getting a decent tailwind from falling US Treasury bond yields. The pair is making new year-to-date lows again today after slipping below the July low at 79.84 and the January low at 79.20. Next support comes in around 78 and the 38.2 Fib retracement level.

We are on for seven days of losses now and prices are oversold on the daily RSI and have scythed through the lower Keltner band. This warns of a pullback, though buyers will need to get back above 80 to slow the strong bearish momentum.

Written on 20/08/2021 by Lukman Otunuga, Senior Research Analyst at FXTM

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AUD/JPY Has Established a Strong Support

79.90-80.60 is the zone where we should be seeing a bounce. Q L5 pivot also protects the bulls. Bullish bounce towards 81.70 is very possible. A close above it will make the price more bullish towards 82.90 and 84.90 as the final target. Look for buying into dips.

For a look at all of today’s economic events, check out our economic calendar.

Cheers and safe trading,

Nenad

 

USD/JPY Price Forecast – US Dollar Breaks ¥110 After Jobs Report

The US dollar has rallied during the course of the trading session on Friday, breaking above the 50 day EMA and of course the psychologically important ¥110 level. That is an area that of course is an important area that we have seen tested multiple times in both directions. The market has a significant amount of resistance just above here at the ¥110.75 level, so whether or not we can break above there is a completely different question, and quite frankly would not be surprised at all to see that area fail. Furthermore, if you look at this chart you can make a little bit of an argument for a descending channel as of late.

USD/JPY Video 09.08.21

If we do turn around a break down below the 50 day EMA, then I think we will start granting down towards the 200 day EMA underneath, which is currently sitting at the ¥108.50 level. After all, the area of about one handle above or we are right now significant resistance that extends all the way to the ¥112 level. It is a longer-term area to worry about, so it makes quite a bit of sense that it would take a massive amount of effort to get through. With that being the case, I think it is only a matter of time before we roll over.

That being said, if the pair does tend to go higher over the longer term, I do not necessarily know that I would be a buyer of this one, but I might be convinced to buy pairs with a bit more alpha, speaking specifically of the GBP/JPY pair, AUD/JPY pair, and the NZD/JPY pair.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Price Forecast – US Dollar Continues Upward Momentum

The US dollar has rallied a bit during the course of the trading session on Friday to reach towards the ¥110.50 level, an area that has been important a couple of times in the past, and it is an area that should attract a certain amount of attention. If we can break above the ¥111 level, then it is likely that we go looking towards the ¥112 level. That is a major resistance barrier going back several months and years, so if we can break above there then it is likely that we could continue a longer-term move.

USD/JPY Video 26.07.21

If we pull back from here, the 50 day comes back into the picture which happens to be just below the ¥110 level. Ultimately, this is a market that I think will try to decide what to do next, because if we break down below there then we could dip towards the ¥109 level. I think the only thing that you can count on in this market is going to be choppiness and noisy behavior. This makes quite a bit of sense considering that both currencies are considered to be “safety currencies”, and therefore it does make quite a bit of sense that we go choppy more than anything else.

In fact, when you look at this chart a lot of times you can use it as an indicator as to where the Japanese yen is going to moving in general. If this pair falls, a lot of times I will short something else like the AUD/JPY, GBP/JPY, etc. On the other hand, if this pair rises then it makes sense that this pair signals that those other pairs could go higher. In that sense, this is a tertiary indicator.

For a look at all of today’s economic events, check out our economic calendar.

The Stock Market Is At An Important Inflection Point

Within my latest piece discussing the merits of deflation, I briefly touched on how several leading economic indicators appear to be signally growth may have peaked for the time being. Whilst these business cycle and growth metrics are not necessarily useful on their own, when the price action of equities appear to be confirming the macro message; it may be time to pay attention. Such at time appears imminent.

Looking at two of my preferred leading macro indicators of the business cycle, the ERCI weekly leading index and global credit impulse, both are signaling peak growth may be in the rear view mirror.

Source:    Economic Cycle Research Institute

Source: Economic Cycle Research Institute

Source:    Alfonso Peccatiello - The Macro Compass

Source: Alfonso Peccatiello – The Macro Compass

Confirming this message are the most economically sensitive sectors of the stock market. Retail, transports, metals/mining, materials and the industrials sectors have all underperformed these last few months relative to the S&P 500. When the markets goes on the make a new high and all economically sensitive sectors such as these do not confirm the new high, it is a clear signal the new highs are not being supported by economic fundamentals.

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Indeed, these recent highs have seen a significant rotation out of the reflation and value type sectors back into the growth darlings. Market breadth, another excellent measure of market internals, has too not confirmed the recent highs. We are seeing significant bearish divergences in almost all measures of breadth, and the recent rally is almost solely being driven by the likes of Apple and Amazon.

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In the past, periods of poor breadth amid new highs in the major indices have generally lead to at least some form of correction or consolidation. It is perhaps unsurprising then to see that small-caps and emerging markets have gone nowhere over the past six months (in a similar manner to the economically sensitive sectors illustrated above) whilst the broad market has continued to march higher.

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The market is now almost entirely being driven by a rotation out of cyclical sectors and back into tech, FAANG and defensive stocks.

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Such periods of tech outperformance coinciding with the market cap weighted S&P 500 outperforming the equal weighted S&P 500 have been reminiscent of market tops in recent months.

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Continuing this theme of non-confirmation are investor risk-appetites. Firstly, the pro-cyclical currency pair of AUD/JPY and AUD/USD both appear to be rolling over. The strength of the Aussie dollar is generally a good proxy for risk-on and risk-off type environments.

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Extending this out to a longer-term perspective, another chart I referenced within my deflation article was the long-term AUD/JPY FX pair, which looks to have broken out of its bearish rising wedge pattern at the top of its near decade trading range.

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Continuing with risk appetites via the VIX, which is effectively investors expectations of volatility over the coming month, the VIX has not made new lows over recent months as the market has gone on to make new highs. Such divergences between the two have typically preceded periods of market turmoil in the past.

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Turning now to the technicals, they too are bear a similar message. On the weekly chart, we are seeing slight negative divergences in RSI and money flow, accompanied by a 9-13-9 weekly DeMark sequential sell signal.

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What’s more, we are amidst a seasonally weak period of stocks, almost indicative of what I have detailed above. Clearly, we can see on many different measures that stocks are seemingly at risk of some form of correction, or at the very least, a period of consolidation.

SPY Seasonality.jpeg

In isolation, these indicators and measures are not of much use, but, in the case where they align to tell a similar story at once, it is important to take heed. I personally tend to favor trades and investment opportunities whereby fundamentals, technicals, sentiment and macro all align. For the most part, now appears to potentially be such a time.

However, I shall stress I am by no means predicting a significant risk-off event is imminent. For fear of being labelled a “perma bear”, let met be clear I am merely presenting a number of important measures investors should take heed of as part of their own due diligence and risk management. The clear takeaway from what I have presented above is that the risk-reward set-up for equities is not overly favorable at present. Nevertheless, there does remain pockets of value and opportunity still to be found within these markets.

Those who have been readers of my previous writings will be well aware of how I have deemed there to be several decent buying opportunities in the gold and precious metals market of late. At the risk of repeating myself once more, dare I say it but today stands as another such opportunity for investors seeking to deploy capital. In terms of valuations and fundamentals, the gold miners are clear standouts.

Source:    Sprott via Ronnie Stoeferle

Source: Sprott via Ronnie Stoeferle

However, fundamentals in isolation may not necessarily be meaningful if they are already priced in. It does however appear this is not the case. We can see this by comparing the divergence between the gold price and real interest rates. This is an inverse relationship that has historically nearly always held up, and is a key driver of the gold price. Given how real rates remain deeply negative today, it seems only a matter of time before the gold price catches up to real rates. One way to view this is by using TIPs as a proxy for real rates relative to gold.

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Will gold follow real rates? Seasonality suggests it will.

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To conclude, the market appears to be running our of gas. I for one would use a potential pull-back as a buying opportunity for several sectors and assets I am bullish on. I love the green-energy trades in uranium, copper and carbon credits, but, given how far these sectors and assets have come in the past year I would love to see further weakness before I begin buying. Again, that does not mean opportunities are not present right now, gold is perhaps the perfect example, and it looks like it may be an excellent time for investors to take profits out of the favored and deploy capital into the unfavored.

For a look at all of today’s economic events, check out our economic calendar.

Exclusive: BOJ Seen Cutting This Year’s Growth Forecast as COVID-19 Curbs Hurt Outlook

But the central bank is likely to maintain its view the world’s third-largest economy is headed for a moderate recovery as robust exports and output offset some of the weakness in consumer demand, said four sources familiar with its thinking.

The expected downgrade highlights Japan’s struggle to contain the COVID-19 pandemic, as slow vaccine rollouts and a resurgence in infections force authorities to declare a state of emergency for Tokyo just 16 days before the Olympic Games begin.

“The foundations of a recovery are in place, but the timing may be delayed somewhat,” as the curbs weigh on the economy’s expected rebound in the current quarter, one of the sources said, a view echoed by three other sources.

In most recent forecasts made in April, the BOJ expected the economy to expand 4.0% in the current fiscal year ending in March 2022, higher than a 3.6% growth projected in a Reuters poll.

At its July 15-16 policy meeting, the BOJ will likely cut the current year’s growth forecast in fresh quarterly and inflation projections, the sources said. It is also widely expected to keep monetary settings unchanged.

In the new estimates, the BOJ will likely revise up this fiscal year’s consumer inflation forecast mainly reflecting the boost from recent rises in energy costs, the sources said.

The growth projections for next fiscal year ending in March 2023 will depend much on when households begin to feel safe enough to boost spending on leisure and travel, analysts say.

The central bank currently expects the economy to expand 2.4% next fiscal year and 1.3% the following year.

The BOJ estimates that households have 20 trillion yen ($182 billion) in “forced” savings accumulated last year due to stay-at-home policies, which could be tapped when vaccines are rolled out widely.

Japan’s economy shrank an annualised 3.9% in January-March and likely barely grew in the second quarter, as the pandemic took a toll on service spending.

Analysts and policymakers had expected the economy to enjoy a solid rebound in the latter half of this fiscal year, in part hoping that steady vaccinations and removal of curbs would spur pent-up demand for leisure and travel.

For a look at all of today’s economic events, check out our economic calendar.

($1 = 110.0400 yen)

(Reporting by Leika Kihara and Takahiko Wada; Editing by Shri Navaratnam)

 

Few FX Pairs Where We Are Still Waiting for a Breakout

First one is the GBPUSD pair, where the price is inside the flag formation, just below crucial long-term highs. Breakout to the upside, will give us a signal to buy.

The USDJPY pair is testing the lower line of the flag. Breakout should activate more sellers.

The EURGBP pair with a descending triangle pattern. Currently aiming its horizontal support.

The EURJPY pair testing the neckline of a big H&S pattern. That can result with a breakout.

The CHFJPY pair with a H&S pattern on a long-term resistance. Possibly an interesting trade for the sellers.

The AUDJPY pair is trying to break the upper line of the triangle but the first attempt looks bad. It is possible that a false breakout is happening right this moment.

The GBPJPY pair showing the beauty of price action. First two pennants and now very clean flag. Breakout to the upside can be a great buy signal.

For a look at all of today’s economic events, check out our economic calendar.

Terrible Month for USD but Maybe the Last Day Will Be Better

Gold attacked a crucial support again but this time with a very sharp fall.

Brent oil initiated a bearish correction.

The Dow Jones is still in a pennant waiting for a breakout.

The DAX is still in a rectangle pattern also patiently waiting for a direction.

The EURUSD has started a bearish correction.

The Canadian Dollar is still going stronger.

The EURAUD is in a symmetric triangle waiting for a breakout.

The AUDCHF is in a similar situation.

The EURNZD is also waiting to end the sideways trend but in this case, the price is locked inside of a rectangle.

The AUDJPY defends a crucial support level after the bullish breakout from the triangle. It’s an interesting opportunity in terms of risk to reward ratio.

The ZARJPY defends the neckline of the head and shoulders formation.

The USDHUF is in a long-term sell signal after the price drops below the major support.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Price Forecast – US Dollar Threatens 109 JPY

The US dollar rallied significantly during the course of the trading session on Thursday to test the top of the shooting star from the previous session, suggesting that we are going to try to break above it. If we do, that would be an extraordinarily bullish sign, and could send this market towards the ¥110 level again. This is probably not about the US dollar, but more or less about the Japanese yen as it is getting hammered by several different currencies right now.

USD/JPY Video 30.04.21

The 50 day EMA is currently offering support, and it does look like the market is respecting that. Furthermore, the 38.2% Fibonacci retracement level has offered support, and we did form a couple of hammers in that general area. That being the case, I think that the uptrend can continue, but if we were to break down below this hammers, that could open up a move down to the 200 day EMA.

Ultimately, I think that the Japanese yen is a currency that is going to be in trouble going forward, due to the lack of yield coming from the bond market. With this being the case, I do look to buy the dip in not only this pair but multiple other ones like the AUD/JPY, NZD/JPY, and even the lowly CHF/JPY pairs. With this being the case, I think that we have much further to go, and, in this pair, I suspect that ¥110 will be the next target if we can break above that shooting star.

For a look at all of today’s economic events, check out our economic calendar.

AUD/JPY Short Selling at the Top

The AUD/JPY has made a strong resistance at the top. 88.6/W H4 camarilla/ATR pivot. We should see a move down.

1-2-3 pattern comes exactly at the resistance and we should see a strong move down. The move could happen today as there are a lot of sellers at the POC zone. See the wicks on the candlesticks. Targets are 84.01, 83.70 and 83.11. Additionally we also see a descending trend line at the top, between the points 1-3.

For a look at all of today’s economic events, check out our economic calendar.

Cheers and safe trading,

Nenad

 

GBP/JPY Vs GBP/USD and USD/JPY – March 6th, 2021

GBP/USD last week fell 236 pips from 1.4015 to 1.3776 while overbought GBP/JPY rose 257 pips from 148.14 to 150.71.

Known since the 1930’s, the Japanese pegged GBP/JPY to UK Gold for not only economic viability but the first incursion to the western world of finance. The standard to hold GBP/JPY to the UK held throughout Bretton Woods. Upon the 1972 free float, GBP/JPY became attached permanently with high +90% correlations to GBP/USD.

All JPY cross pairs followed with high and positive correlations as AUD/USD and AUD/JPY, NZD/USD and NZD/JPY, EUR/USD and EUR/JPY while USD/CAD and CAD/JPY became polar opposites as both permanently correlate negatively. USD/CHF and CHF/JPY traditionally also hold opposite correlations.

The Japanese offered not only a double trade but GBP/JPY and GBP/USD as the same exact currency pairs. The same principle holds true for EUR/JPY and EUR/USD, AUD/USD and AUD/JPY and NZD/USD and NZD/JPY. The double trade is permanent for USD/CAD and CAD/JPY.

Why JPY cross pairs remain overbought into week 6 amd not falling with counterpart currencies is the USD/JPY problem to correlations. While GBP/USD correctly correlates to GBP/JPY at +94%, GBP/JPY also not correctly correlates to USD/JPY at +83%. A further problem exists as GBP/USD correlates to USD/JPY at +46 %. All correlations are not only running positive but this situation is the exact same for AUD/JPY, NZD/JPY, EUR/JPY, CAD/JPY and explains why prices remain high and overbought.

Positive correlations are the result of exchange rate prices and relationships to moving averages since correlations are found within the context of averages. USD/JPY trades above vital 105.70,  GBP/USD above 1.3697 and GBP/JPY above 144.80. Correlations are positive because prices trade above respective high / low averages.

Required to assist GBP/JPY to drop is GBP/USD breaks 1.3697 or USD/JPY trades below 105.70. GBP/JPY then decides to fully correlate to USD/JPY or GBP/USD. GBP/JPY in every instant follows GBP/USD as the 91 year correlation and order of currency markets.

Current GBP/JPY trades 1156 pips above GBP/USD and 2506 pips below GBP/CAD. GBP/JPY larger range from GBP/USD becomes 144.08 and 1.5564. GBP/JPY above is located the 14 year average at 155.38 and the 10 year at 148.36.

Prior to the 2016 interest rate changes by the central banks, the market order to currency pair arrangement existed as GBP/USD, GBP/JPY, GBP/CHF then GBP/CAD.

The new order is arranged as GBP/CHF, GBP/USD, GBP/JPY then GBP/CAD and seen as GBP/CHF 1.2855, GBP/USD 1.3820, GBP/JPY 149.86 or 1.4986 then GBP/CAD 1.7292. Much daylight exists for GBP/JPY to trade freely between GBP/USD and GBP/CAD yet 250 pips traded last week from a distance of 1100 and 2500 pips between exchange rates.

Why GBP/CHF and all currency  pairs arranged as Other Currency / CHF dropped from contention as support is due to the uniqueness to the SNB’s interest rate system. Libor is miles from actual interest rates as first comes Saron, Call Money rates and the most vital Debt Register Claims.

JPY cross pairs overall contain downside moves from GBP/JPY at 300 pips and 200 for AUD/JPY and NZD/JPY.

USD/JPY for the week is not only light years overbought but the 5 year average is located at 109.01. A good target is found at 106.65.

GBP/JPY big break lower is located at the 10 year average at 148.38. A break then GBP/JPY trades 146.00’s easily.

GBP/USD this week opens between 1.3768 and 1.3840. Below 1.3768 challenges most vital 1.3697, above 1.3840 then GBP/USD travels much higher.

GBP/CHF and GBP/CAD run good and positive correlations at +93% and +96 % for GBP/CAD. For GBP/NZD and GBP/AUD remain problems as correlations run negative at -43% and -64% for GBP/AUD.

GBP/JPY

Included are GBP/JPY moving averages from 5 day to 253 days. The averages are perfect and derived from the ECB. The first number is the day average followed by trading days then the average.

A 20 day average is actually 15 days, a 50 day average is actually 36 days. Trading day averages to factor perfectly start at the beginning of every year then the numbers increase as days trade. A 50 day average is most stable as it only trades 36 to 50 days.

A 5 day average begins Monday at 2 days, then 3 for Tuesday and Wednesday and 4 for Thursday. A full 5 day average only trades on Fridays.

5 Day     5             149.2391

10 Day  9             149.1325

20 Day  15           148.3808

50 Day  36           145.2691

100 Day               71           142.5398

200 Day               143       139.9417

253 Day               180       139.1231

As GBP/JPY trades lower then the averages drop.

Targets

Targets are not only known miles ahead but targets stack to watch trades unfold.

Current targets: 149.7549, 149.8496, 149.5086, 148.1852, 146.0887, 143.7901, 143.0356.

The ECB and most central banks factor exchange rates to 6 decimal places and 4 for USD/JPY and JPY cross pairs and I follow the ECB exactly.

EUR/USD Vs USD/JPY, Close Prices and Next Week

EUR/USD most significant high/ low point is located at 1.2026. A break however at 1.2020 represent a wholesale trend change for a lower EUR/USD. Current EUR/USD trades above 1.2026.

USD/JPY on the other side trades above its significant high/ low point at 104.72. Both EUR/USD and USD/JPY are mis aligned. Either USD/JPY remains above 104.72 and trades higher or EUR/USD must break below 1.2026 and 1.2020 to trade much lower to 1.1700’s. In the interim, both pairs are in a standoff.

Noted from USD/JPY constituents, USD/CAD trades below its high / low point at 1.2867 and USD/CHF below 0.8980. USD/JPY remains the outlier USD pair for the past two weeks.

From the January 3rd long term forecasts, the next major USD/JPY inflection point is located at 106.00 exactly and USD/JPY traded to 105.75 then dropped. While 106.00 above represents the next break, below is located the 10 year average at 103.33 and a 267 pip range.

EUR/USD however must break below its 10 year average at 1.2107 to target the vital breaks at 1.2026 and 1.2020. Above is located the 14 year average at 1.2625. As EUR/USD trades above 1.2107 then the wide range becomes 1.2625 to 1.2107 and a 518 pip range. EUR/USD overall hasn’t changed its 518 pip range since January 8 as important MA’s are dropping simultaneously.

Most important point at 1.2625 however is dropping ever so slowly week to week as is 1.2107. A much lower EUR/USD is ahead in weeks to come.

Between 1.2107 and 1.2624 exists minor daily and weekly trade points.

USD/JPY however above 106.00 exists a vital average every 100 pips until the 5 year average at 109.09. USD/JPY’s counterpart due to the exact same pair is CHF/JPY and it trades above 116.20.

For USD/JPY today, best shorts are located at 105.37 and 105.30 to target 104.90. Longs are located at 104.31 and 104.37 to target 104.64. The break at 104.72 however represents a lower USD/JPY next week.

EUR/USD close price today is forecast at 1.2109 and below 1.2137. This places EUR/USD next week between 1.2082 to 1.2137 for next week.

USD/JPY above 104.72 represents a problem for AUD/JPY as it trades above its 5 year average at 79.70 and NZD/JPY trades above its 10 year average at 75.42. Both are mandatory breaks for AUD/USD to trade lower and break its vital MA at its rising line at 0.7557 and NZD/USD 0.7070.

Any price today for AUD/JPY ar 81.57 is a good short to target 81.17 and today’s close price is forecast at 80.96.

Not only are all JPY cross pairs richter scale overbought but most trade near vital inflection points. EUR/JPY 128.24 is next above Vs below at 125.93 or a 231 pip range. Close price forecast today for EUR/JPY at 126.83 places EUR/JPY at perfect neutral to begin next week.

GBP/JPY trades deeply overbought between vital 5 and 10 year averages at 142.47 and 148.27. Good short today is found at 145.26 to target the close price forecast at 144.08. Quite a distance for a Friday. Above 144.08 then GBP/JPY remains deeply overbought heading into next week.

Overbought GBP/USD forecast close price is located at 1.3741. Shorts today are located at 1,.3866 and 1.3857 to target 1.3772 then 1.3741.

For oversold EUR/CAD, next week 1.5471 high/ low point we’re watching closely.

For high flyer and wide ranger GBP/AUD net week 1.7900 represents the big break. 1.7900 broke this week and traded to 1.7785. EUR/AUD and GBP/AUD’s counterpart must break 1.5923 to trade higher. GBP/AUD break at 1.7900 represents an alignment to EUR/AUD as both now trade below respective MA’s.

For oversold USD/CAD, close price today is forecast 1.2753. Shorts today are located at 1.2787 and 1.2773 to target 1.2731 then 1.2696.

Oversold EUR/GBP trades just above its 5 year average at 0.8725.

S&P bottom and long entry is located at 3896.71 and just ahead of 3861.36. Long target is located at 3906.58 for a quick 10 point trade today.

DAX today must trade back to at least 13970.70. Note most vital today at 13926.28 then 14029.00, 14084.78 then 14156.47. Above 13970.70 targets 14029.00.

 

GBP/JPY Price Forecast – British Pound Fails to Break Through Resistance.

The British pound has rallied a bit during the trading session on Wednesday, but continues to struggle with the ¥142.50 level, as we have pulled back significantly from that level. Nonetheless, this is a market that will continue to be supported underneath, as there are plenty of buyers on dips from everything that we have seen. The more, I do think that the “risk on trade” will probably continue to be the favored one, but we have a lot of work above that we need to get through.

The ¥140 level underneath continues to be rather important from not only a large, round, psychological important figure standpoint, but the fact that it has previously been both structurally supportive as well as resistive. Because of this, I think that we probably get a short-term pullback towards that area before we may get a bit of extended buying pressure. The 50 day EMA sits just below the ¥140 level as well, so that makes that area interesting from that standpoint. Furthermore, the trend has clearly been to the upside when it comes to the British pound in general, so there is no need in fighting that.

It appears that the trend is trying to build up enough momentum to go to the upside even further, so even though this candlestick suggests that we are going to fall in the short term, I do not like the idea of shorting this pair, rather I think that we are more than likely going to continue to see a deaf opportunities to buy the dip that it is exactly what we should be doing over the longer term.

For a look at all of today’s economic events, check out our economic calendar.

Dollar’s Weakness is Back

Gold creates a double bottom formation with two hammers on a daily chart.

Nasdaq and DAX bounce from the upper line of a correction pattern.

Dollar index cancels the Inverse Head and Shoulders and drops lower.

EURUSD starts bullish correction.

AUDJPY is heading higher after testing the neckline of a giant iH&S pattern.

USDCHF bounces from the neckline and drops lower with a proper sell signal.

CADCHF goes lower after the false bullish breakout from the symmetric triangle.

For a look at all of today’s economic events, check out our economic calendar.

Dollar Tries a Reversal. Indices Still Hold Up High

Fear&Greed Index points towards a bearish movement.

Put/Call Ratio as well.

Gold still in positive territory despite the recent drop.

Dax settles above 13800.

SP500 bounces from the 3780.

Dollar tries a reversal.

EURUSD touches the long-term up trendline.

EURJPY breaks and settles above a major horizontal resistance.

AUDJPY finally breaks the neckline of the iH&S formation.

For a look at all of today’s economic events, check out our economic calendar.

Great Occasions on The JPY

The Santa rally is here; indices are skyrocketing with the DAX finally hitting all time highs. Pretty remarkable if you ask me but in today’s analysis I will focus on the Japanese Yen, which is part of three very interesting setups.

Let’s start  what I believe is the best pair, the EURJPY. Here, we definitely have a positive sentiment, which originally started with the inverse head and shoulders pattern in Q4. After the price broke the neckline, we got a very nice upswing followed by a flat correction shaped like a rectangle. Yesterday, the price broke the upper line of the resistance and today, for the first time since August, it’s trading above the major horizontal resistance of 126.7. Once the price closes above this resistance, we’ll get a proper buy signal.

Now the AUDJPY, where the price is preparing for a major buy signal. First of all, the AUDJPY broke the crucial long-term down trendline, connecting lower highs since 2014. Furthermore, the price created an inverse head and shoulders pattern and the price is currently trying to break the neckline. A breakout from that resistance level would trigger a proper long-term buy signal.

Finally the USDJPY, a combination of two weak currencies, which leads to a sideways. Recently, the price bounced from a combination of dynamic and horizontal resistances. If the price stays below those resistances, there’s no buy signal. We will however see a buy signal if one of two scenarios plays out; either if the price manages to close the day above the two resistance levels, or a if there’s a breakout of the mid-term dynamic support connecting higher lows since mid December. As for now, we’ll wait, the signal will most likely come soon.

For a look at all of today’s economic events, check out our economic calendar.

Indices and Commodities Climb Higher

Commodities are enjoying the weaker USD and advancing higher.

Indices also going up, not disturbed even by new lockdowns.

EURUSD is about to test crucial horizontal resistance.

EURJPY in a sideways trend below 126.7.

AUDJPY with an inverse head and shoulder and breakout of a long-term down trendline.

USDCAD still near lows after the breakout of major horizontal support.

GBPCHF with a breakout of the lower line of the triangle.

EURAUD with a possible false bearish breakout from the rectangle.

For a look at all of today’s economic events, check out our economic calendar.

Commodities Up, Dollar Down Ahead of The NFP

Gold tests 1850 USD/oz resistance

Oil breaks the upper line of the flag and aims higher

American Indices keeping close to the all-time highs

European Indices, on the other hand, performing slightly worse

Dollar Index going deeper again

EURUSD continuing a great upswing

EURJPY testing important horizontal resistance. Double top possible

AUDJPY bounces from the neckline to test important horizontal support

USDCAD continues the downswing after breaking crucial horizontal support

For a look at all of today’s economic events, check out our economic calendar.

Buyers Try to Stop This Bearish Madness

 

DAX broke the lower line of the wedge

CAC broke the lower line of the triangle

NASDAQ creates inverse head and shoulders pattern

SP500 bounces from the 38,2% Fibonacci

Dollar Index creates double top formation just above crucial resistance

EURUSD and GBPUSD try to initiate a bullish reversal with the double bottom formations

EURPLN finally escapes from the triangle to the upside

AUDNZD tests the broken support as a resistance

AUDJPY with the false bullish breakout and the head and shoulders pattern

For a look at all of today’s economic events, check out our economic calendar.