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Japanese Yen Continues to Slide (EUR/JPY, AUD/JPY, NZD/JPY)
The EUR/JPY completed a double bottom last week then broke above the 138.30 level, which cleared not only the double bottom resistance but a falling trendline along with the 50- and 100-day simple moving averages. The Daily RSI broke above 60, showing loss of bearish momentum. As we get into the 9/18 session, price continued higher and broke another falling trendline coming down from the 145.69 high from Dec. 2013. As the daily RSI approaches 70, and price approaches a falling trendline from 143.78, we can expect some pullback. If the market is bullish, we should see buyers at or above 139.00, the daily RSI should stay above 40, preferably 50. Then, the bullish outlook can gain weight toward the 143.78 March high, then the 145.69 Dec. 2013-high.
The AUD/JPY found support this week after falling from 96.67. It found support around 96.50, which is a previous resistance for a multi-month consolidation. The fact that price respected this level as support adds to the case of a bullish continuation in the AUD/JPY. In the 4H chart, you can also see the market moving above last week’s double bottom, and also breaking above this week’s consolidation. It is clearing above the moving averages and the RSI is moving above 60. Signs are point north, with at least the 98.67 high in sight.
The NZD/JPY was bullish from February to April, rallying from 81.42 to 89.92. Then, it traded sideways, coming down to 85.86 and holding below that 89.92 high. This week, price is moving above the middle of this consolidation, bringing back the bullish bias. As price moves above the cluster of moving averages, and the RSI approaches 70, the mode is shifting from neutral, to neutral-bullish. NZD/JPY looks poised to test the highs around 89.90. If we get a pullback, look for support a bullish market should keep price above the 87-87.50 area. Otherwise, the pair would be back in neutral mode, with short-term bearish bias toward 85.86.