Technical Update - JPY pairs: Indicators indecisive about the direction Technical Update - JPY pairs: Indicators indecisive about the direction Technical Update - JPY pairs: Indicators indecisive about the direction

Technical Update - JPY pairs: Indicators indecisive about the direction

Forex 4 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

  • USDJPY is caught range-bound in a tight range between 151.95 and 150.84
  • EURJPY rejected at retracement level just below 165. Expect pair being hit by high volatility
  • AUDJPY failed to close above previous peak. Could slide back to test key support at 98.20
  • GBPJPY bouncing around between 0.786 Fibonacci retracement levels. What is the direction?

USDJPY is caught range-bound in a tight range between 151.95 and 150.84. A daily close above or below these levels is necessary to indicate the next direction.

A close above 151.95 suggests short-term upside potential to the 1.618 projection at 153.60. Conversely, a close below 150.84 indicates that a correction down to support at around 149.20 is quite likely, potentially extending down to the 0.618 retracement at 148.58.

While the RSI is indecisive, this strength indicator is showing positive sentiment, indicating potential for higher USDJPY values. However, RSI is also exhibiting divergence—RSI values are declining while USDJPY have moved higher—suggesting that the bullish push to test 151.95 could be nearing exhaustion, and a correction may be unfolding shortly

Source all charts and data: Saxo Group
EURJPY got rejected at the 0.786 retracement level at 164.77. Expect significant volatility in the next few days.

Last week's low at 162.60 and the lower rising trendline could be tested. If breaking below that level the 0.786 retracement at 161.31 is likely to be reached.

A push above yesterday's peak at 164.92 is likely to also take out the previous peak at 165.35.

RSI is showing divergence, indicating that EURJPY is most likely to drop lower. On the other hand, the moving averages are all rising, indicating underlying bullish sentiment
AUDJPY failed to close above the previous peak at 100.17.
The pair could retrace back to test the key strong support at around 98.20 once again.

The RSI divergence is indicating AUDJPY is likely to see taht scenario to play out.

However, a likely scenario for AUDJPY is range-bound trading between 100 and 98.20. A breakout is needed for medium-term trend direction
GBPJPY bounced last week from the 0.618 Fibonacci retracement at 190.08 only to be rejected at the opposite 0.618 retracement at 192.19.
That is the range GBP/JPY needs to break out of for direction.

A bearish break, i.e., a break below 190, could lead to a move to the 0.786 retracement at 189.15, possibly extending all the way down to key strong support at around 187.90.
Conversely, a bullish breakout, i.e., a break above 192.19, could see the previous peak at 193.51 being tested.

RSI is showing positive sentiment with no divergence, suggesting a bullish breakout for GBPJPY

Quarterly Outlook 2024 Q2

2024: The wasted year

01 / 05

  • Macro: It’s all about elections and keeping status quo

    Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.

    Read article
  • FX: The rate cut race shifts into high gear

    As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.

    Read article
  • Equities: The AI and obesity rally is defying gravity

    Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.

    Read article
  • Fixed income: Keep calm, seize the moment

    With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.

    Read article
  • Commodities: Is the correction over?

    Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.

    Read article
Disclaimer

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000
Australia

Contact Saxo

Select region

Australia
Australia

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.