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Japanese Yen Price Action Settings: USD/JPY, EUR/JPY, GBP/JPY, AUD/JPY -by Ecork

Talking points for the Japanese yen:

The Japanese yen continued its heavy selling after the Bank of Japan’s interest rate decision last week.

With much of the developed world turning toward a more hawkish policy, expectations are building that Japan will do the same. But, as we heard last Thursday night, the BoJ was not yet ready to remove the massive easing that had been in Japan since 2016, and that seems to have kept the door open for another string of yen weakness.

I looked into it on Friday Right after this interest rate decision, it highlights the potential for a breakout in the USD/JPY pair between a number of other yen pairs. Since then, the USD/JPY pair has surged to a new high, this time a 24-year high while breaking through the 135.00 level. psychological level He had hampered the progress earlier in June.

USD/JPY Monthly Chart: 24-Year Highs

The graph was prepared by James Stanley; USD/JPY on TradingView

USD/JPY: What’s Next

The uptrend is still attractive here but the timing is concerning, as the pair just broke out to a new freshwater high. The chase appears ill-advised and given resistance building at the 135.00 region, this offers some potential support for pullback issues.

But for those who are still very aggressive, the price may not go back to 135.00 as the current price is more than 120 pips away. Alternatively, a closer level at 135.60 previous swing high could be used. This can be seen as a kind of ‘s1’ with the 135.00 level acting as a ‘s2’ support point.

Four hour chart of USD/JPY

Four hour chart in US dollars

The graph was prepared by James Stanley; USD/JPY on TradingView

Euro / Japanese Yen

Given the events of the past two weeks, the EUR/JPY pair became attractive on the long side last week. The European Central Bank has begun to shift toward a more hawkish policy, albeit in a very slow and tepid fashion. At this point, the Bank of Japan has not even begun this transformation. In Europe, the inflation rate exceeded 8% and in Japan it exceeded 2%. Therefore, most likely, we will see more pressure on the European Central Bank to step up anti-inflation efforts while Japan may have a further slowdown in dealing with the issue.

As we looked at it last Friday, this bullish turnaround in the European Central Bank combined with the continued caution in the Bank of Japan – along with the morning star on the daily chart of the EUR/JPY – opened the door to the possibility of a breakout in the EUR/JPY. Japanese yen with focus on retesting the highest level in seven years at 144.25.

EUR/JPY daily chart

EURjpy daily chart

The graph was prepared by James Stanley; euro/ Japanese Yen in Tradingview

This high water mark has not been reached yet but the price is making rapid progress towards this area, take a short term look at the chart, there might be more potential for a breakout after this price.

On the chart below, we can see price action brewing in an inverted head and shoulders formation, which keeps the door open for a possible bullish breakout after the top at 144.25.

Four hour chart of EUR/JPY

EURJpy four hour chart

The graph was prepared by James Stanley; EUR/JPY on TradingView

British Pounds / Japanese Yen

The GBP/JPY pair is approaching a huge resistance point.

This spot at 168.05 is 61.8% Fibonacci retracement From the 2015-2016 main step. That level hit a high in April and then again a couple of weeks ago, and at this point, hit a six-year high in the pair.

GBP/JPY monthly price chart

gbpjpy monthly chart

The graph was prepared by James Stanley; GBP/ Japanese Yen in Tradingview

The large spot of support in the pair was played to the right side of the 160.00 level just last week. This support reversal led to a trampoline-like bounce that has yet to slow, and the price appears to be moving aggressively towards revisiting that previous high.

Overall, revisiting that resistance is attractive for continued breakouts. But, given the pace of the trend, the pair has added more than 700 pips in less than a week, and if the price is to re-approach that resistance, the range will be more than 800 pips. So, the possibility of a breakout remains, as well as the possibility of a pullback when it enters this resistance, after which the upside attributes can become attractive for trend-following strategies.

Four hour chart of GBP/JPY

gbpjpy four hour chart

The graph was prepared by James Stanley; GBP/JPY on TradingView

Australian dollar / Japanese yen

AUD/JPY saw similar strength and the pair is currently testing the psychological 95.00 level as resistance. Above that, at 96.57, there is a Fibonacci retracement of a long-term move that is currently helping to define a seven-year high in the pair. A break of 95.00 opens the door to retest the Fibonacci resistance with a rise of about 150 points, after which the price is trading in an open area on the chart, as seen in the month below.

AUD/JPY monthly price chart

audjpy monthly chart

The graph was prepared by James Stanley; Australian dollars/ Japanese Yen in Tradingview

In the shorter term, we could see a 61.8% retracement of the same major move that gave support in early May, making a strong turnaround with the price quickly rising to 78.6%. But, now after pulling back, resistance 95 holds the highs with the possibility of that still happening.

AUD/JPY daily chart

audjpy daily chart

The graph was prepared by James Stanley; AUD/JPY on Tradingview

— written by James StanleyAnd the Senior strategist for DailyFX.com

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