Forex Video Briefing (8/8) – USD/JPY, EUR/JPY, GBP/JPY
The USD/JPY fell below a rising trendline from mid-July, which takes away the bullish outlook from a week ago, when USD/JPY rallied to 103. With the 103 level holding as resistance and price unable to hold above 102, USD/JPY is pressured with focus toward the 101-101.10 July – lows, as well as the 100.75 low on the year.
The EUR/JPY has been weak, mostly due to euro weakness. The strength in JPY has pulled the EUR/JPY to a fresh low on the year when it broke below 136.22, to a low of 135.73 before finding some intra-session support. At this point, a break above 138 will be needed to shift the market away from its currently bearish mode. Otherwise, EUR/JPY continues to have downside risk toward the 133.75-134.10 area in the short-term, and possibly the 131.20 low from Nov. 2013 in the medium term.
GBP/JPY fell sharply this week, breaking below a rising trendline connecting February and May’s lows. You can also see the daily RSI dip below 40, which shows loss of the bullish momentum made during June and early July when price made a fresh high on the year at 175.36. Looking at the daily chart, it looks like the market is holding off this bullish outlook and shifting back into consolidation. However, the 200-day SMA and the 170.00 psychological level will be a key support. If price can stay north of 170.00, the market might remain bullish. However, we should be looking for further consolidation, with downside risk in the short-term toward the March’s lows around 168. At this point, only a break above 173 will confirm the bullish outlook.