Yen Pairs Weekly Update - May 13 close

USDJPY

The Dollar-Yen climbed again to 81.00 as we had expected, nearly reaching the middle line of the daily Bollinger bands. On weekly charts we can appreciate a very small inside doji candle, and markets were mostly consolidating although in a slightly rising move. Price has broken last week’s resistance level 81.30 as to now, reaching the confluence of the three moving averages (presently close to 82.00) and momentarily retesting the break. If this level holds as support, we would be aiming to reach 81.90 which if broken would lead us to the next level at 82.60 (50% retracement on the weekly swing low and confluence of middle line of Bollinger bands and SMA34). If price breaks down the support, we would be targeting a retest of the lows at 79.60/50 as first target, and on a medium term view, an extension to 78.30 or round number 78.00 (138.2% daily and 127% weekly levels respectively).

EURJPY

The Euro-Yen failed to retest the upside break and continued its fall towards our targeted level 114.00 and beyond, ending on Friday above the 127% extension on the previous daily swing low, quite close to the SMA200 and 138.2% extension, while sitting above the weekly SMA34. A bounce from those levels was to expect and indeed occurred early this week, and price is now back again above the daily SMA100 and aiming in the direction of the middle line of the bands at around 117.80/118.00. There is a resistance zone between 116.40 and 117.00 which might offer some struggle but I think price can go further up if the actual support range between 115.90 and 115.60 holds.

The Geppy went back bullish until last Wednesday, reaching above our conservative targets with a quick spike to 134.00 which was strongly rejected from the daily middle line of the bands. The price pierced last week’s lows making a new low at 130.25 and closed barely below the broken support line and furthering the break of the SMA200. On the weekly charts we can see it extended to the 138.2% level from the previous swing low and remained below the SMA34. It has been recovering since Sunday open and is now trading again above the daily SMA200, but the tone seems back to the bearish zone now and I would expect a fall to the 138.2% daily extension or at least to the round number 129.00. The alternative scenario that I see is a rangebound move between the 133.00 and 131.00 levels.