USDJPY and EURUSD Technical Analysis

A week ago, EUR bears were likely chilling their champagne bottles in anticipation of potential profits to be realized as of the close of trading this week. An ECB with a worsening economic outlook seemed to be a ripe environment for sharp losses. On Wednesday, when the ECB met, the markets grabbed onto the message that the ECB will consider whether it needs to mitigate any of the side effects from negative rates and the long-term bank funding “solution: known as TLTRO-III, but that was not enough to bring out the bears accumulation of shorts.



Now, the EUR is moving to the highest levels since late March after forming a potential double-bottom low of $1.1184 per EUR on April 2nd (monthly opening range low).

more...

The Japanese Yen has returned to the defensive against the US Dollar after a period of daily-chart strength last week, with USD/JPY well illustrating the value of Fibonacci retracement levels to technical analysis.



Between April 7 and 10 the pair retreated below the uptrend channel which had previously bounded trade since the lows of March 25. A surge in market risk aversion saw the Dollar and Yen locked in a ‘battle of the havens’ which the latter seemed to be winning. USD/JPY saw three consecutive days of quite heavy falls up to April 10.
However, then Mr. Fibonacci took charge. USD/JPY’s fall duly halted at the first, 23.6% retracement level of 2019’s rise.

That came in at 110.86 which, not at all coincidentally, was the intraday low of April 10. Since then the pair has edged albeit gingerly back into that uptrend channel and, perhaps as significantly, risen back into the important resistance zone composed of the previous significant highs. They were struck in early March.

more...

Negative Break to The Downside

Since early Jan GBP/JPY has been trading to the upside from the higher-high created on Jan 25 at 144.84, to Feb 7 higher low at 141.01. On Feb 25 the pair opened with an exhaustion gap indicating that the uptrend would end soon.
GBP/JPY started to correct this movement on April 3 carving a lower high at 147.20 and a higher low on April 9 at 144.78, then to start a bearish movement creating on April 12 another lower high at 147.01 with a lower low on April 25 at 143.76.

On May 6 bearish momentum gained strength when the price opened with a breakaway downside gap, starting a sell-off so the price closed on May 10 at 142.98. On Monday GBP/JPY opened with a measuring gap at 142.77 encouraging the pair to move further to the downside breaking below the levels mentioned in last week article 141.90 and the 141.04 – 140.94 zone.

more...

The Japanese Yen is now a clear winner in its battle of the havens with the US Dollar. Global risk aversion largely rooted in the intensification of trade war between China and the US has seen USDJPY retreat very close to its lows for the year, which were made in early January.

Technically speaking the pair now flirts with a decisive break of 108.43 on its daily chart. That point is significant because it marks the fourth, 61.8% Fibonacci retracement of the rise up from the lows of March 2018 to the peak of October the same year. That peak has not been topped since.
If a break lower through it is confirmed then the Dollar will find itself in a zone of support between that point and 106.97 which is the final retracement point before the pair is looking at total negation of the entire rise.

more...

USD/JPY: Retail trader data shows 70.8% of traders are net-long with the ratio of traders long to short at 2.42 to 1. In fact, traders have remained net-long since May 03 when USD/JPY traded near 111.552; price has moved 3.5% lower since then. The number of traders net-long is 3.5% higher than yesterday and 12.1% higher from last week, while the number of traders net-short is 2.3% higher than yesterday and 2.7% higher from last week.

more...

EUR/USD: Retail trader data shows 64.8% of traders are net-long with the ratio of traders long to short at 1.84 to 1. The number of traders net-long is 9.2% higher than yesterday and 58.3% higher from last week, while the number of traders net-short is 9.0% higher than yesterday and 32.0% lower from last week.

more...

The Japanese Yen remains the beneficiary of a broad fundamental haven bid against the US Dollar with USDJPY bulls’ current modest fightback unlikely to last. The pair got a boost on Tuesday of this week when the Trump administration indicated that some tariffs against China could be delayed.

However, much of that rise has already been retraced and the Dollar remains very close to lows not seen since March 2018 if the ‘flash crash low of 104.68 hit on January 2 this year is ignored. If as currently seems likely the pair is indeed topping out again, support can be expected at those previous significant low. That come in at 105.05. Should they give way in turn, then more interesting and possibly resilient support lies below it at 104.65.

more...

Looking at the daily chart, we notice at the start of this week USD/JPY opened with an upward gap, since then the pair has been moving ineffectively reflecting the market’s indecision. Currently, the price is moving in the trading zone 105.50 – 107.30 and eyes a test of the high end of the zone, contingent on overtaking the 107.00 handle.

Thus, a close above the high end could push USDJPY towards 108.61. Although, the weekly resistance levels and area marked on the chart (zoomed in) should be kept in focus.

On the other hand, a close below the low end may send the USDJPY towards 104.77 however, the weekly support area underlined on the chart needs to be watched closely. Further close below 104.77 could press the price even lower towards 103.07. The weekly support levels should be considered.

more...

US Dollar weakness and a general push toward counter-cyclical perceived haven assets have seen the Japanese Yen break through an important barrier against the greenback. However, Yen bulls have yet to nail down their gains and they may yet lose them if they can’t do so this month. At the start of August, USD/JPY slipped below an important medium-term monthly-chart uptrend line which had previously held since May 2016. It didn’t remain below it for the entire month but did close out underneath, where, so far, it remains.

Another monthly close below this line would make matters a lot worse for Dollar bulls, and, although it’s still early in September, they seem to be showing some fight. Their first order of business must be to recapture near-term resistance at 106.79. That marked the intraday peak of August 15 and can be seen as the bottom of a narrow range of daily-chart resistance which has the peak of August 6 (107.04) as its top.

more...

The Euro seesawed but ultimately found its way higher even as the ECB reintroduced quantitative easing alongside an interest rate cut that brought its target lending rate deeper into negative territory. Imperviousness to typically negative news flow often speaks to potent underlying strength, but the single currency’s advance also stopped conspicuously short of breaking its near-term downtrend.

Prices now stand squarely at resistance guiding them lower since late June. That barrier is reinforced by former support in the 1.1069-1.1116 area, now acting as an upside hurdle. Breaking above that on a daily closing basis would neutralize near-term selling pressure and set the stage for a move higher to challenge the 1.12 figure. On the downside, the September 3 low at 1.0926 marks the lower bound of a choppy range.

more...