Technical Analyst, Saxo Bank Group
Summary: JPY pairs seem to be in rebound mode after heavy selling past couple of weeks. RSI indicator is support bearish move exhaustion
However, USDJPY seems to be the heavier of the JPY pairs where AUDJPY seems the pair more likely to be reversing to bullish trend.
EURJPY and GBPJPY could be caught range bound with high volatility for the rest of the year.
Here are the key levels to look out for
USDJPY has now failed 3 times to close below key support at around 141.70 and could be set for a minor rebound possibly up to the 0.618 retracement at 144.44 or 0.786 retracement at 145.38.
However, the trend is still bearish and will remain so until USDJPY is breaking above 146.60.
The declining 55 and 100 Daily Moving Averages are indicating underlying bearish trend and are adding to the overhead resistance
RSI is also in negative sentiment and with no divergence indicating USDJPY could resume downtrend a make new low below 141.70.
If USDJPY does in fact close below 141.70 a push towards 138 level would be in the cards
EURJPY having bounced from the 200 DMA several times now the cross could rebound further towards resistance at around 157.70 resistance. A close above 157.70 could give energy to the 0.618 retracement at 159.67. The divergence on RSI is supporting the rebound scenario.
If RSI is closing above its upper falling trendline it would further support the rebound
Key strong support at around 153.00 could be tested if EURJPY is trading back below the 200 Moving Average
GBPJPY has now bounced twice from strong support level around 178 and the 200 Moving Average.
During the selling pressure over the past couple of weeks divergence on the RSI has formed indicating exhaustion of the bearish move.
Further rebound is in the cards. A break above 181.75 is likely to fuel a rally towards 183.60-184.30.
A close above 184.32 will confirm GBPJPY bullish trend
RSI divergence is supporting the rebound scenario, However, a break back below 180 could see the pair once a gain moving towards the 178 level
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