Macro: Sandcastle economics
Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.
Technical Analyst, Saxo Bank
Summary: JPY pairs have experienced heavy selling lately but are now hitting support levels. Will they break the supports or rebounding to resume uptrends?
USDJPY technical picture is a bit muddy. The pair has dipped below the 0.786 retracement past three trading days and with the RSI showing negative sentiment (it is below 40 threshold) there are indications USDJPY could be testing the key strong support at around 145.89.
However, the 55 and 200 Daily Moving Averages (DMA) are rising indicating underlying bullish trend. The 100 DMA is declining weighing on USDJPY i.e., holding it a bit back
A daily close above 148.15 could be the start of a strong bounce that could take USDJPY to the strong resistance and 0.618 retracement of the sell-off at around 149.20
If sellers can push USDJPY below the past three day’s lows a test of the strong support at around 145.90 is likelyEURJPY correction has found support at the 0.618 retracement at 160.23 and seems to be rebounding.
The 55 and 100 Daily Moving Average’s are adding to the support.
AUDJPY is bouncing from just a few cents above the 0.618 retracement at 96.86. The 100 DMA is offering some support and the RSI is still showing positive sentiment and there is no divergence.
That draws a picture of AUDJPY is likely to resume uptrend. A close above 98.20 will confirm that.
A break below 96.85 is likely to fuel another round of selling down to 0.786 retracement at 96.26GBPJPY is testing key support at around 187.86. A break below 187.86 could push GBPJPY down to next support at around 186.17
If bouncing from the 187.86 support uptrend is likely resuming. An RSI close above its falling trend line would be first indication of that scenario to play out