Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
Access both platforms from your single Saxo account.
Technical Update - USDJPY and EURJPY closing in on 150. Can prove to be a tough test for the pairs
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
Both USDJPY and EURJPY are closing in on 150 level. Price levels not seen in years. Trend is strong but indicators suggest it is stretched.
USDJPY has formed an almost text book 5 wave uptrend pattern with the current uptrend as an extended fifth vawe
USDJPY broke above its 2011 peak and resistance at 147.65. The 147.65 resistance was also within few pips of the 0.786 length of vawe around 147.25 and close to the 1.764 projection (146.51 to be exact) of the correction from 2015 peak to 2016 trough. 200% or 2.0 projection of that correction is at 152.90 which would then be next possible target for USDJPY.
If vawe 5 is to be as long as vawe 3 USDJPY is looking at 157.68.
However, Technically there is no strong resistance before around 160 which is the 1990 peak.
Monthly RSI is stretched currently above 85, the highest reading ever and currently no divergence supporting the view of higher levels in USDJPY.
USDJPY is close to the 1.618 Fibonacci projection of the very volatile 22nd September at 149.34.
1.764 projection is at 150.15.
Short-term on daily time period there is divergence on RSI – at the time of writing – but it is very close to be traded out i.e. price and RSI being pushed higher. If RSI closes the day above 78.79 the divergence has been cancelled indicating even higher USDJPY.
For USDJP to reverse the short-term uptrend a close below 143.50 is needed.
EURJPY has been in a broad uptrend since Q2 2022 with high volatility. With the close above 145.63 yesterday EURJPY further confirmed the uptrend. RSI above 60 supporting the bullish outlook.
On weekly chart RSI has broken above its falling trendline indicating that despite there is divergence further upside is likely. If RSI closes above the horizontal dashed line the divergence is cancelled.
To reverse the trend medium term, a close below 137.50 is needed.
Longer term EURJPY has been in an uptrend since 2020 and is closing in on 2014 peak and strong resistance at around 114.80. A spike above 150 should not come as a surprise.
If EURJPY closes above 150 there is no strong resistance until around 170. However, if that scenario plays out (that EURJPY closes above 150) the uptrend will be so stretched some big correction or even reversal should be expected.
Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Equity Outlook: Will lower rates lift all boats in equities?
Peter Garnry
Chief Investment Strategist
After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto... -
Quarterly Outlook
FX Outlook: USD in limbo amid political and policy jitters
Charu Chanana
Chief Investment Strategist
As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ... -
Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c... -
Quarterly Outlook
Commodity Outlook: Gold and silver continue to shine bright
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
FX: Risk-on currencies to surge against havens
Charu Chanana
Chief Investment Strategist
Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo... -
Quarterly Outlook
Equities: Are we blowing bubbles again
Peter Garnry
Chief Investment Strategist
Explore key trends and opportunities in European equities and electrification theme as market dynami... -
Quarterly Outlook
Macro: Sandcastle economics
Peter Garnry
Chief Investment Strategist
Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p... -
Quarterly Outlook
Bonds: What to do until inflation stabilises
Althea Spinozzi
Head of Fixed Income Strategy
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ... -
Quarterly Outlook
Commodities: Energy and grains in focus as metals pause
Ole Hansen
Head of Commodity Strategy
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...
Disclaimer
The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)