Has Yen Reversed Trend?
Alexandros Yfantis | Feb 07, 2014 08:07AM ET
Yen has reversed its intermediate and short-term trend relative to its most pairs from December, while things accelerated in its favor during the last couple weeks when US, European and Japanese markets entered a correction period and fell substantially. The oversold conditions for Yen have now been stabilised and with equity markets bouncing upward after the sharp decline, there are signs across several JPY pairs of an imminent trend reversal against JPY.
USD/JPY
The first chart we are looking at is the daily candlestick chart that comes from 2012 and shows us the long-term upward sloping channel that current price movements have reached the lower boundaries. The entire upward move from 76 could be labeled a complete 5 wave pattern. However we also look at the alternative bullish scenario where only wave (1) of 5 is complete at 105.40 and wave (2) of 5 has ended at 100.69.
The decline from the all time highs as shown in the following chart looks corrective as prices make an overlapping pattern and there is no clear impulsive move. The downward sloping channel is clearly shown below and taking into consideration that the decline has reached the 50% Fibonacci retracement of the rise from 96 to 105.40 there are many chances this was the end of wave (2). So we now look for impulsive wave action upwards to confirm our bullish view.
Important short-term support for this pair is found at 101.20 as shown in the last chart below. The upward sloping pitchfork provides support at 102 and with a higher highs and higher lows pattern in the making, trend is reversing upwards.
Important resistance for the long-term trend is the 103 price level that we should watch.
EUR/JPY
This pair has also given another short-term bullish signal and a possible intermediate low is in. Prices continue to trade inside the downward sloping channel, however an impulsive upward move is probably unfolding. Above 140 we could have confirmation of a trend change as long as prices do not fall below the 136.20 level.
CAD/JPY
This is our last pair for today that has signaled a bullish trend reversal and is trending upwards. CAD/JPY has already broken out of the downward sloping trend channel. However its still too early to tell, but it looks like that bulls are giving a big fight at the boundaries of the channel.
Get The News You Want
With the recent upward move from 90.75 making higher highs and higher lows, we turn bullish as long as prices do not break below 91.
The upward potential for all these pairs is huge if we get confirmed that the downward move was a correction and a new upward move is at its beginnings. For more help trading FOREX become a member today. As always, thank you for taking the time to read my new post.
Disclosure: None of the information or opinions expressed in this blog constitutes a solicitation for the purchase or sale of any security or other instrument. Nothing in this article constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. Any purchase or sale activity in any securities or other instrument should be based upon your own analysis and conclusions.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.