Yen Pairs Weekly Update - Feb. 18/23 close

USDJPY

Last week the Dollar-Yen made a bearish move after a higher weekly high, bouncing from the SMA34 and still inside a symmetrical triangle. Daily charts show a retracement on previous swing high, ending near the 38.2% level on Friday. I was expecting a further retracement down to the 50% level on both time frames, around 82.50/60 (middle line of the Bollinger bands on weekly, confluence of SMA100 and SMA34 crossing on daily). We have seen up to Wednesday close a bearish acceleration reaching that target and getting past it, beyond the daily 61.8% Fibonacci retracement on previous swing high. We are now trading at psychological level 82.00 and well below the moving averages, the scope of this bearish move is very probably going to attain the lower daily bands level at another round number, 81.00 just below the previous early February lows. Given that the pattern shown on weekly charts is clearly a huge bearish flag, my expectations are for an extension below 80.40 if the triangle is finally broken to the downside.

EURJPY

Euro-Yen closed last Friday at the upper trend line of a symmetrical weekly triangle formation, and opened on Sunday just above, at the level of the previous highs. On daily we seemed to have a double top after a cross of all the moving averages. My weekly expectation would have been to break the triangle and reach further to the upper Bollinger band (115.70/116.70), however the pair reacted to that double top (after a slight push above 114.00 which was promptly rejected on Monday). We are now trading 100 pips lower and about to reach the middle line of the daily bands at 113.00. I still think that this level could hold as support and would favor a bounce from the middle line or maybe lower at the SMA34 level (presently 112.50) to make another attempt at breaking Monday highs and reach psychological level 115.00 (November 2010 highs). Should the pair continue its bearish move we would be revisiting the lows near 112.00 then daily SMA100 at 111.40/50 (near a 38.2% Fibonacci retracement on previous daily swing high). We have a strong support presently at that level, being that both SMA100 and 200 are in confluence on the daily charts.

GBPJPY

The Geppy shows a rising wedge on the daily charts, which suggests a correction is near. My expectations for this pair are for a retest of the previous weekly broken level which coincides with the 38.2% Fibonacci retracement at 131.80/90, where we also had the confluence of the daily SMA34 and SMA200 on Friday, with a shorter term target at the middle line of the daily Bollinger bands where we could have some bounce back up. Indeed this pair reversed on Wednesday, but we are now again on the descent near first target at around 132.00. Still about 100/120 pips to go but this pair and its huge moves can perform this trajectory in no time. The support area between 131.00 and 132.00 might be tough as it was a steady consolidation area in January and we have presently both SMA100 and SMA200 holding its boundaries.