Yen Pairs Weekly Update - March 18 close

USDJPY

The Dollar-Yen recovered last Friday all of its fall from the beginning of the week, but was again rejected at key level 82.20/00 and stabilised just above 80.70 (61.8% Fibonacci retracement). We were watching 80.00 as the point of possible bank heavy intervention, but the price went through 350 pips further south on Thursday, and only at 76.50 did the pair start to come back to its previous balanced levels. Weekly broken ascending trend line was retested and held, leaving the close at the lower Bollinger band level. On the Daily charts, it bounced from the confluence of SMA100, SMA34 and middle line of the bands. I would expect a period of consolidation above and at the round number (0.8000/0.8140) not much to say tonight as it’s a Bank Holiday so we will have to wait a few days for prices and fundamentals to settle down. I would avoid Yen pairs at the moment, as all three majors are exhibiting the same chart and candle patterns.

EURJPY

We were expecting a double bottom at late February lows, however we did make a double bottom on weekly but at the level of January lows, 600 pips lower… Here on Euro-Yen the price also recovered up to its former levels even more than the Dollar-Yen, ending on a long-legged “inside” doji. Daily charts would suggest that a further extension to the upside is possible, we are trading above all moving averages and middle line of the Bollinger bands, and price is quite close to the previous highs. However and as I said above for the USDJPY, I would stay out of the Japanese market by now and also here some consolidation period above the middle line is to be expected (114.50/115.50). If the highs are broken, we could reach around 119.00 (118.50/119.50) over the next few days or weeks (127% and 138.2% Fibonacci extension on the previous swing high).

GBPJPY

The Geppy “crashed” all the way down to the exact level of the lower trend line of the descending weekly channel and violently broke our expected target at the 161.8% Fibonacci extension. As well as for the other two Yen majors, we have the same long-legged doji candle on the charts, and a recovery of all the losses to stabilize around the levels price had before the terrible events that affected Japan. Here we are just below the parallel confluence of all moving averages and middle line of the Bollinger bands on the daily charts, while price closed and is still as of now below the weekly SMA34 and middle line of the bands. However, the descending weekly channel has been broken and price remains above the already retested level, and also here I would expect a consolidation between 131.20 and 132.80, which is about the range delimited by the flat moving averages on daily charts. As for the USDJPY and the EURJPY, better to wait for a clearer picture and a stabilization of the current scene.