USDJPY - Let Battle Commence!

There's an battle going on between the bulls and the bears on this currency as we are reading completely different stories depending on which time frame you're looking at.

The ST & MT charts paint a pretty bullish picture which still has a valid target of 109.00 yet to be reached, formed from a breakout of a symmetrical chart pattern on the daily candle sticks close to the apex (See more from previous blog post on 10/12/13).  However if take a step back and look further out on the LT chart, we have a (potential) downtrend line being tested from the peaks in 1998 and 2007.  We have already satisfied the 38.2% retracement on this chart, which now brings the 50% level into play at 111.20.

USDJPY - Keep a eye on the long term chart

The BoJ's ultra loose monetary policy continues to weaken the Yen and risk appetite across the board is increasing off the back of positive global economic sentiment economic as well as improving job market data, reducing the demand for 'safe haven' currencies.  

The positive job data will also inevitably bring us back to the FED tapering debate and when the market expects this to happen but most analysts aren't forecasting this to happen till March time though some are erring on the earlier side, potentially even in Jan or Feb.  This should lead to strength coming back into the USD, though we also have to bear in mind that the Republicans & Democrats still have to thrash out a Debt ceiling deal in February which is always a bit of a pantomime so might see some volatility around these upcoming months.

USDJPY - Rangebound

Symmetrical triangle continues to form on the USDJPY, with the range tightening so a breakout of the chart pattern is looking more likely as it approaches the apex.  Bystanders are patiently waiting for further action from the BOJ mentioned in the post on 13/08/13. Range trading is the best option for now whilst waiting for a breakout.  On a breakout of the chart pattern on the upside would give it a projection of 108.00

USDJPY pushing higher

On the USDJPY we broke out of the down trend channel a couple of weeks ago and tried to break out, but what might have caught people out was by retesting the previous down trend line.  This held however last week and we saw a strong rejection of this level.  Since then, we have rallied back pretty convincingly to back above the 99.00 level.

MACD crossed over the 0 line confirming the up move.

USDJPY - break out on the cards IF positive Non-farm data

Following on from my last note 13/08/13 USDJPY looks like were hovering around the top of the channel and more importantly, above the 98.00 support level.  Not sure if we will see too much movement ahead of the Non-farm payrolls later today at 1.30pm (GMT) though, but on a positive number we are poised to break out on the down channel and 20day SMA, confirming the cross on the MACD.  A negative number could push us back down and could retest the 96.60 level again.

USDJPY - Is the Yen soon to be under attack again?

After Japan's recent economic results the BoJ is back in focus, and we're starting to hear a little noise surrounding the Yens recent recovery against the western currencies.  We've seen a good 700point rebound in it from its recent lows, but the question is now, is it sustainable?

Sales tax hikes are due to increase from 5% to 8% by April 2014 in order to tackle the monstrous government deficit that the country is currently in an ageing population (on the 09/08/13 the government debt passed the 1 Quadrillion Yen mark for the first time ever, thats 15 zeros after the 1 to you and me!).  This should really put a dampener on consumer expenditure and with business investment on the decline some people are questioning whether the PM is actually going to follow through with the original plan.

USDJPY under pressure on the near term....

Looks like the Symmetrical Triangle that I wrote about yesterday that was forming is now being broken (the curse of the commentator!#?) Tech indicators are confirming down move this and suggesting that we could be going further lower  before heading back higher.  Elliott 3 wave correction (A,B,C) still intact so our MT & LT views still remain as before. I must note a big sell off could start to change this view however.

Elliott ruling the waves for the USDJPY

 The USDJPY is starting to look interesting again. Taking a step back, the recent 2013 rally took the currency to the 38.2% retracement and previous cycle lows very nicely indeed and we've seen somewhat of a consolidation since then as we saw a lot of resistance at these levels.  The downtrend line is still valid but has yet to be tested properly.