Technical Update - USDJPY bouncing from support. EURJPY correction could be over and new highs in the cards
Kim Cramer Larsson
Technical Analyst, Saxo Bank
USDJPY is bouncing from support. 145.30 resistance is key.
EURJPY seems ready to break out of corrective flag pattern. If it does 150 is in the cards
USDJPY is bouncing from the 0.618 retracement of the uptrend since August around 138.62 now testing 0.382 retracement of the sell-off at 141.93.
RSI has broken above its falling trendline and USDJPY could bounce to test the 0.618 retracement at 144.57.
If USDJPY closes above resistance at 145.30 it is likely to look for new highs.
If the rebound fizzles and USDJPY drops below 137.65 support at 135.86 is likely to be tested and the possibly also the 0.786 retracement at 135.
EURJPY seems to be trading in a corrective falling like pattern – also called a Flag.
RSI is set to close above its falling trendline and if it does we could see EURJPY testing the upper trend line in the Flag. A close above that trendline could fuel another rally higher towards 150.64- 151.70. a level not seen since 2008.
A close above 147.11 will confirm that bullish scenario.
IF EURJPY instead slides lower closing below 142.50 there could be down side potential to around 139 with support around 141.
Latest Market Insights
Q4 Outlook 2022: Winter is coming
- Winter is coming to the financial markets as central banks are tightening their grip. How spring will look is still a question.
European energy crisis: it will get worse before it gets betterThe winter in Europe will be tough, but whether the result is political chaos or sustainable, innovative solutions is still undecided.
A difficult and volatile quarter awaitsAs the year draws to an end, commodities continue to be at centre stage of the world with growth pockets political uncertainty.
The bright side: crises drive innovationThe positive spin on crises is that they come with solutions. It is worrisome that deglobalisation may be a response to this crisis.
Green transformation in China: renewable energy and beyondGoing green, China needs to span numerous energy sources to ensure stability, as every source comes with a challenge.
Asia: Intermittent solutions, but a faster renewable adoption curveAsian energy supply is being squeezed. This and the adoption of renewables may change the investment sentiment in the region.
FX: A Fed thaw needed to deliver a sustained USD turn lowerThe US Dollar can keep momentum when the Federal Reserve continues to tighten, leaving the rest to play to their drum.
Autumn can become ugly for equities and bond holders. Comfort for Dollar longsTechnical analysis suggests that equities could face a tough Q4 as could fixed income. US Dollar positions could provide some upside.
The next stock market sector to watch, with stocks going nuclearAs the world scrambles to find affordable, sustainable energy, nuclear is getting attention from politicians and investors alike.
The crypto space is getting cold when the hype disappearsCryptocurrencies face a winter of their own as retail investors and governments are asking tough questions.