Technical Analyst, Saxo Bank
Summary: JPY pairs are on the move nearing key resistance levels.
AUDJPY seems to be trying to have another go at the key resistance at around 93.00. Resistance at around 93 is strong with both 100 daily coming down (below93.00) and the 200 SMA providing resistance.
RSI is showing positive sentiment indicating higher AUDJPY however, and a close above 93.00 is likely to lead to a rally to next resistance at round 95.40.
For AUDJPY to reverse this bullish scenario a close below 90. Is likely to initiate a sell-off down to strong support at around 87.90
CADJPY has broken bullish out its falling wedge like pattern and has established a short-term uptrend. The Pair looks set for a test of the 0.382 retracement and resistance at around 101.00.
RSI is close to switch to positive sentiment (if closing above 60).
A CADJPY close above 101 is likely to add to the bullish sentiment for a move to the 0.618 retracement at around 104.35.
For CADJPY to reverse this uptrend a close below 95.94. A break below the upper falling trendline in the falling wedge would be first warning of this scenario to play out.
EURJPY is forming an Ascending triangle like pattern. Break out needed for direction. However, EURJPY is likely to test strong resistance at around 143. A close above is likely to fuel a rally to strong resistance at around 146.40
A close below 139.55 will reverse the possible bullish scenario and is likely to push EURJPY down to support at 137.35
NZDJPY is breaking bullish out of its Flag pattern correction and seems set for at test of key strong resistance at around 85. A close above is likely push RSI to close above 60 threshold i.e., showing positive sentiment thus giving energy to a rally towards December peak around 88.
If NZDJPY retraces back below 82.30 the potential bullish move is demolished and a retest of support around 80.70 is likely to be tested.
USDJPY is testing key resistnace at around 132.90. A close above will confirm short-term uptrend with potential to a move toa round 136.55-137.85. 100 and 200 daily SMA will provide overhead resistance.
IF USDJPY closes above 133 RSI is likely to close above 60 threshold i.e., in a positive sentiment supporting the bullish view.
For USDJPY to demolish and reverse this scenario a drop back below 129.75 is needed.
2024: The wasted year
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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.
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.
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.
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.
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.