6 Nov 2013
Flash: Yen strength against EUR, GBP technically viable - JPMorgan
FXstreet.com (Barcelona) - While the Yen looks vulnerable against the US, it still keeps the door open for a temporary recovery in the crosses, notes Thomas Anthonj, FX Analyst at JP Morgan Securities.
Key Quotes
"While USD/JPY is still favoring an upside break out of the consolidation triangle at 99.18 (daily chart) for a minimum advance to 101.39/54 (int. 76.4 %/pivot) and a possible retest of the 103.74 top, we see fairly big setback risks in the Crosses and in particular in EUR/JPY where an upward sloping, converging triangle poses a strong reversal threat."
"For this threat to unfold its devastating implications based on the completion of a possible 5-wave cycle up from 94.11 (July 2012 low) it however takes a break and daily close below daily triangle support (at 132.16 today)."
"Above the latter, an extension up to 138.35/139.14 (Fib.-projection/2009 high) can’t be excluded yet, but in order to now shake off the ruling bears, it takes a decisive break above 134.80 (minor 76.4 %). Below 132.16 though, we'd be faced with a minimum setback risk to 124.97/95 (former lows) if not to 122.05 (int. 38.2 %)."
"GBP/JPY shows a similar setup but as long as key-support at 154.73/55/07 (pivot/weekly trend/pivot) is not broken we have no evidence at hand that a 5th wave top is in place and that 162.21/163.11 (Fib.-projection/2009 high) is not in focus anymore. Below 154.07 though, the bears would have taken over full control, shooting for 151.09 (200 DMA), for 147.62/11 (previous lows) and for 145.05 (int. 38.2 %) next."
Key Quotes
"While USD/JPY is still favoring an upside break out of the consolidation triangle at 99.18 (daily chart) for a minimum advance to 101.39/54 (int. 76.4 %/pivot) and a possible retest of the 103.74 top, we see fairly big setback risks in the Crosses and in particular in EUR/JPY where an upward sloping, converging triangle poses a strong reversal threat."
"For this threat to unfold its devastating implications based on the completion of a possible 5-wave cycle up from 94.11 (July 2012 low) it however takes a break and daily close below daily triangle support (at 132.16 today)."
"Above the latter, an extension up to 138.35/139.14 (Fib.-projection/2009 high) can’t be excluded yet, but in order to now shake off the ruling bears, it takes a decisive break above 134.80 (minor 76.4 %). Below 132.16 though, we'd be faced with a minimum setback risk to 124.97/95 (former lows) if not to 122.05 (int. 38.2 %)."
"GBP/JPY shows a similar setup but as long as key-support at 154.73/55/07 (pivot/weekly trend/pivot) is not broken we have no evidence at hand that a 5th wave top is in place and that 162.21/163.11 (Fib.-projection/2009 high) is not in focus anymore. Below 154.07 though, the bears would have taken over full control, shooting for 151.09 (200 DMA), for 147.62/11 (previous lows) and for 145.05 (int. 38.2 %) next."