Weekly Forex Play June 2, 2013


USD/JPY Weekly Close: 100.46 (-.84%)
Weekly High/Lows for:

USD/JPY 102.53/100.22
EUR/JPY 132.16/130.20
GBP/JPY 154.67/152.24
AUD/JPY 99.07/96.06
CAD/JPY 99.03/96.78

USD/JPY Weekly Pivots: S3: 97.31; S2: 98.76; S1: 99.61; P: 101.07; R1: 101.91; R2:103.37; R3: 104.22

USD/JPY and JPY PAIRS: USD/JPY and JPY pairs continued to consolidate last week and this should continue into this week, with the AUD/JPY, CAD/JPY and NZD/JPY making new weekly lows on this correction off the highs. Continued discussions over the timing of the Fed’s tapering of the asset purchase program continues to play out in the markets. Both the S&P and the DOW sold off heavily towards the end of the week, making new lows on the week, with the Dow closing at 15,115 and the S&P at 1629.7. Both 10 and 30-year Treasury yields also rose on the week. The market is shedding risk as evident by the market moves last week. With the selloff in equities and JPY pairs, unwinding of positions or profit taking, after very strong trend moves, will likely continue into this week. Watch the calendar this week with news releases, as the calendar is heavy across the board. Three central banks meet this week with their rate statements, including the RBA on Tuesday and both the ECB and the BOE on Thursday.

Moving to the technicals, we posted 6 JPY pairs to see where the potential correction might take us. Since last week’s post, the 3 commodity JPY pairs continued to sell off into their 4th wave of a lesser degree targets. The USD/JPY is slowly moving lower, while the EUR/JPY and GBP/JPY are trading sideways. A C-leg of a zigzag pattern will take those crosses lower but for that to happen the EUR/USD and the GBP/USD need to sell off as well. Since both dollar pairs staged recoveries last week, we may be in for more sideways price action until Thursday.

Jody Samuels, Currency Trader and Coach

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