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Althea Spinozzi
Head of Fixed Income Strategy
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Technical Update - USDJPY, EURJPY, AUDJPY, GBPJPY and CHFJPY rejected at key resistances. Where to now?
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Summary: JPY crosses rejected at key strong resistance levels. They could all be caught range trading next 5-8 days before deciding on a direction. Keep an eye on the key levels as outlined in this analysis
USDJPY bounce has spiked above the key strong resistance at around 144.95 to the 0.50 retracement at 146.08 only to lose momentum and close back below the key resistance.
A close above is needed for upside momentum and to establish a bullish trend.
RSI is still below 60 threshold i.e., in negative sentiment.
USDJPY needs to close above 141.55 and RSI to close above 60 to establish and confirm and uptrend.
However, there is strong overhead resistance at around 146.59 (minor) and 147.50 (strong). Around that area the 55 and the 100 DMAs are adding to the resistance.
If USDJPY is failing to close above 144.55 the cross is likely to be sliding back to 142.85 possibly lower.
If December low at 140.25 is taken out USDJPY is likely to sell-off down to around 138
EURJPY peaked just above strong resistance at around 158.55 but is currently trading below .
A close above is minimum requirement for EURJPY to even establish an uptrend. However, the4 55 DMA is adding to the resistance and
RSI needs to close back above the 60 threshold to confirm any uptrend. If that scenario plays out a swift move to the 0.786 retracement at 161.92 is in the cards, potentially higher.
EURJPY could over the next few days slide back to test its lower rising trendline. A rising trendline in what appears to be an Ascending triangle like pattern in which the pair could be caught trading the next week or so.
If EURJPY is closing below its lower rising trendline the bearish trend is likely to resume with support at around 155 and 153
A close above is minimum requirement for EURJPY to even establish an uptrend. However, the4 55 DMA is adding to the resistance and
RSI needs to close back above the 60 threshold to confirm any uptrend. If that scenario plays out a swift move to the 0.786 retracement at 161.92 is in the cards, potentially higher.
EURJPY could over the next few days slide back to test its lower rising trendline. A rising trendline in what appears to be an Ascending triangle like pattern in which the pair could be caught trading the next week or so.
If EURJPY is closing below its lower rising trendline the bearish trend is likely to resume with support at around 155 and 153
AUDJPY rang out of steam just a few cents short of the strong resistance at around 97.58
RSI is still in negative sentiment failing to break and close above the 60 threshold thus indicating AUDJPY to slide back towards the key strong support at around 95.80
The JPY pair could however, be caught range bound between 97.58 and 95.80 for the next few days possibly weeks
GBPJPY rejected at key resistance at round 184.32. RSI also rejected at 60 threshold meaning sentiment is still negative.
A set back to around 180 could be seen. However, the rising 200 DMA will provide support.
CHFJPY has been rejected at the November peak at around 170.50 and could be in the process of forming a Doji Evening top and reversal pattern. It requires a bearish day today Monday to form such a pattern.
However, the RSI has closed back above 60 threshold indicating higher CHFJPY levels in coming weeks. But it will require a close above 170.85 to cancel the (potential) top and reversal pattern.
If that scenario plays out the bullish trend es being extended with upside potential to around 173.82
If CHFJPY is closing below its lower rising trendline the pair is likely to sell-off down to the 0.618 retracement at around 165.48. A close below could sent the pair back down 162 level
However, the RSI has closed back above 60 threshold indicating higher CHFJPY levels in coming weeks. But it will require a close above 170.85 to cancel the (potential) top and reversal pattern.
If that scenario plays out the bullish trend es being extended with upside potential to around 173.82
If CHFJPY is closing below its lower rising trendline the pair is likely to sell-off down to the 0.618 retracement at around 165.48. A close below could sent the pair back down 162 level
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