Macro: Sandcastle economics
Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.
You can access both of our platforms from a single Saxo account.
Technical Update - Bullish trends in JPY pairs are getting more and more ripe for corrections. USDJPY, EURJPY, GBPJPY & AUDJPY
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Summary: Uptrends in JPY pairs are quite stretched and are ripe for corrections. Corrections that are likely to be limited however, with the medium-term trends pointing to higher levels
USDJPY key resistance at 145.30. Keep an eye on rising trendline
EURJPY rejected at 158. RSI divergence warning about a correction
GBPJPY. RSI divergence warning about a correction but buyers keep pushing GBPJPY higher. For how long?
AUDJPY correction seems to be unfolding. Key support at 95.15
USDJPY a correction seems increasingly likely to unfold, short-term. However, resistance at around 145.30 could be tested before a correction is unfolding. A close above 145.30 could result in the uptrend extending to 146.60 before a correction which is the 0.786 retracement – see weekly chart.
If USDJPY breaks below lower rising trendline, key support at 142.25. A close below 142.25 could lead to a larger correction/sell-off down to 139.18 (0.382 retracement) but could dip down to strong support at around 138.80
Weekly chart suggests this is merely just going to be a correction and not a trend change. Weekly RSI is positive without divergence indicating likely new higher USDJPY levels and no strong resistance . A move to the 0.786 retracement at 146.60 should be seen.
However, medium- to longer term 2022 peak just below 152 could be challenged
EURJPY seems to be rejected at 158 and is about to unfold a correction. RSI divergence indicates a weakening of the uptrend short-term further adding to the correction scenario.
A correction down to support at around 154.40 could be seen but a dip down to the lower rising trendline should be expected.
If EURJPY closes below 154.40 a sell-off down to 0.618 retracement at 152.20 could be seen.
For EURJPY to extend the uptrend a closed above 158 is needed supported by RSI closing above its falling trendline
Medium- to longer term EURJPY is in an uptrend with no strong resistance until 169-170.
Weekly RSI showing no divergence supporting higher EURJPY levels. That uptrend will. However be in jeopardy if EURJPY drops to close below strong support at around 150.75
GBPJPY. RSI divergence is warning of a correction. A correction down to test lower rising trendline. If closing below it could drop to strong support at around 174.20.
Short-term support at 179.90 is key. A close below would confirm correction is unfolding.
However, a top and reversal indicator is not yet in place and GBPJPY could continue higher before a correction occurs. A daily close above 184.00 is likely to extend the uptrend short-term before a correction.
The medium-term uptrend is strong without RSI divergence suggesting a correction is likely to be limited. There is room up to resistance at around 188-189.
AUDJPY correction is unfolding and can slide down to the 0.382 retracement at around 93.23. The correction scenario is confirmed if AUDJPY is closing below 95.15. A correction could then be seen down to the lower rising trendline and support at around 93.20
However, with no daily RSI divergence uptrend is likely to resume and AUDJPY could have another go at the strong resistnace at around 97.50.
A close above 97.70 could lead to the medium-term uptrend to be extended to 103-104 resistance area (back from 2013 and 2008)
To reverse the uptrend a close below 172.50 is needed.
Latest Market Insights
Quarterly Outlook 2024 Q3
Sandcastle economics
-
-
Bonds: What to do until inflation stabilises
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.
-
Equities: Are we blowing bubbles again
Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.
-
FX: Risk-on currencies to surge against havens
Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.
-
Commodities: Energy and grains in focus as metals pause
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.
Disclaimer