Yen Crosses are Violent but Present Opportunities

Daily Forex Technicals | Written by DailyFX | Aug 13 08 21:08 GMT |

The Yen crosses are a violent bunch but there are great opportunities right now. Most notably, the EURJPY may be forming a secondary low. EURJPY We wrote last week that “a bullish bias is warranted against 158.60 but with 5 waves up from there, the EURJPY is susceptible to a correction back to at least 165.31.” 165.31 gave way and price spiked below the 61.8% of 158.60-169.97, finding support near the 6/4 low of 161.73. There is a chance that a wave 2 low (within the bullish cycle from 158.60) is in place. GBPJPY The drop from 250 is in 3 waves to this point (A-B-C). However, the advance from 192.60 is choppy and could therefore be a 4th wave that will give way to a 5th wave that ends below 192.60. As long as price is below the trendline drawn off of the July 2007 and November 2007 highs, the preferred count is that the GBPJPY is headed lower (below 192.60). 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. Price plummeted from the line and tested 100 today. A cautious bullish bias is warranted against the trendline that is drawn off of the August 2007 and January 2008 lows. Be aware though that a break of that line could lead to a violent sell-off that would not end until below 92.15. CADJPY The CADJPY has declined as expected but today's reversal candle suggests that the decline may be nearing an end. As such, we are moving from bearish to neutral. Price remains below the 200 day SMA (which exhibits negative slope), which is bearish. However, a potential inverse head and shoulders pattern has formed, which is a bullish reversal pattern. Signals are mixed…be careful. AUDJPY Could the AUDJPY be setting up for a larger bullish break? The count above is a bullish triangle. There are of course alternate counts and the pair could still decline near term even under this count and test triangle support near 90. NZDJPY The NZDJPY broke down over the last week and dropped to its lowest level since last August only to rebound over 300 pips from today's low. Still, the trend is towards lower prices. Look for resistance near former congestion from earlier this month in the .7850-.79 zone. This level also intersects with the underside of a former support line. 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 Disclaimer Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.