USD/JPY Weekly Close: 98.57
Weekly High/Lows for:
USD/JPY Weekly Pivots: S3: 95.20; S2: 95.88; S1: 97.23; P: 97.91; R1: 99.26; R2:99.94; R3: 101.29
USD/JPY and JPY PAIRS: Amidst US government shutdown and political debate over the debt limit, Dr. Janet Yellen is nominated to succeed Ben Bernanke as Chair of the Board of Governors of the Federal Reserve. While the markets are expecting a resolution to the US government negotiations this week, the stock and bond markets have been relatively uneventful despite the drama. On the currency side, the media hype of worst case scenarios of debt default caused bouts of Yen strength on safe haven demand. We will thus focus on the Yen pairs in this analysis.
Moving to the technicals, not all Yen pairs are created equal this week. Three out of the six have obvious chart patterns to discuss, while the commodity Yen pairs are in no man’s land, correcting prior swing moves. Starting with the USD/JPY, the triangle pattern is very close to breaking out for a move higher, and a break of the upper trend line at 99.70 should see follow through with USD/JPY testing the prior swing highs at 100.61, 101.53 and 103.74. Both the EUR/JPY and the GBP/JPY are creating nice ending diagonals or wedges, which when complete will see a move back to the starting point. However, these pairs should continue to move slowly higher in a very choppy fashion until a peak is reached. The AUD/JPY looks to be correcting the down move from market highs which, when complete, could see the AUD/JPY resume its downtrend. Both the CAD/JPY and NZD/JPY are correcting the last swing moves higher. From a technical standpoint they are currently range-bound, and we expect this to continue over the next few weeks. Of all the Yen pairs, the USD/JPY has the potential to trade higher out of this Triangle and the Ending Diagonal patterns will ratchet higher as well. Have a great trading week!
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