Weekly review of USDJPY

Weekly review of USDJPY


Dear Friends
In this post I would like to review USDJPY             pair.
First let’s look at the USD currency.

First thing, I would like to show you is this weekly weighed average YEN (weekly)

If you look at it from a bearish point of view it made a false breakout of the key resistance level and just made a bearish shooting star .

But is not quite bearish yet. Why?

Because it is still bouncing off the EMAs and until we take the EMAs out of the way we cannot say it is a bearish market.

Also if you go to the monthly you will see that this is still a valid bullish market. Just bounced off the EMAs and still can go a lot higher.

I would say it is too early to say whether that strong YEN sell off last week going to continue

Now let me to add some lines:

It becomes more complicated when I draw lines. Price is trapped between support and resistance

The above chart is daily. Again see that how hard it has to fight with the falling trend line and EMAs to be bearish .
You may ask how did I find the support here. See the monthly again.

If you draw these lines you will get support on daily.

Look at the monthly one more time here.

It can be still a potentially a big bullish market if it breaks the falling trend lines as resistance.
Next lets look at the withed average indices

It is average of CAC DAX             FTSE             FTSEMIB NIKKEI NIKKEI futures .

The above is monthly.
Lets look at the correlation between indices and YEN

As can be seen they are negatively correlated and when one of the moves higher the other moves lower (it is daily). If you want to have this chart on you watchlist, just see the screenshot title and add that into your watchlist by clicking on the “Symbol” and type the formula in there.

The lower the indices go the higher YEN goes. For example see FTSE 100             . It just made all time highs.

Or CAC

So after making all time highs, Indices had a pullback last week and that pullback caused YEN to shoot up

well let me get back to the weighted average
Surely Indices have a lot of upside room as you can see.

If we see indices continuing making higher high then YEN should be a lot cheaper

But if I go to the daily I see that price just bounced off a rising trendline and heading lower. Also see how is going to have another pullback after touching EMAs. This is a signal of stronger YEN in short term!

Personally I think we might see a wedge formation before seeing Indices pushing higher and seeing YEN falling.

If we see indices gets to here, then that means YEN going to be a beast for a while.

Next I would like to review JXY             . Weekly

JXY             is YEN currency index. Like DXY             but Japanese version.

Let me zoom in

This is very bearish right?
Pullback from midline and EMAs.
But how does related to YEN currency? Let’s review the correlation

Highly correlated. If JXY             heading lower we shall see YEN falling too. JXY             is clearly bearish . I wish we could see a bullish price action for indices too then we were absolutely certain about YEN bearishness. But it is not

But also see H&S formation on JXY             . Another bearish formation confirmation for YEN.

If we see a break of the neckline YEN going to be in trouble.

Next I would like to investigate YEN futures .
See how it made a H&S at the top of the channel and then made a flag formation but due