JPY – Bullish Momentum Tested in the 1H Time-Frame (USD/JPY, EUR/JPY, GBP/JPY)
The Japanese Yen has extended its strength especially with the BoJ NOT mentioning any further stimulus measures for now. The slowing of growth in China forewarns risk aversion in the Asia region, which adds to the safe-haven flow that buoys the JPY. Over the 4/11 Asian-European session, we saw the JPY give up some of that strength, and in the 1H charts of USD/JPY, EUR/JPY, and GBP/JPY, we see the bearish momentum tested. Let’s take a look.
There is a support pivot around 80.53. As price action digs at this support, it was also at a channel support area. We had a bullish divergence heading into the 4/11 US session, and so far the pair has rallied back to the 81.00 handle. Price is also testing the latest declining trendline seen in the 1H chart. Here the RSI has been pushed to 60 as well. The bearish momentum has been persistent as the RSI reading has held below 60.
A break above 81.00, with RSI popping above 60 would reflect loss of short-term bearish momentum, and suggest further correction to the upside, perhaps toward channel resistance area around 82.00. Maintenance of the bearish momentum however would suggest that there is still further downside risk toward 80.00.
EUR/JPY is in the same predicament as far as momentum goes. The 1H RSI is testing 60 as price action tests a declining trendline, which goes back a little further to the 111.10 high from 4/2. If the market maintains the bearish momentum, the downside risk is toward the next support levels (50% retracement of 97.03-111.42 at 104.22), and a key support cluster at 102.50 (61.8% retracement).
The GBP/JPY is not much different as far as momentum goes. The RSI is at 60, testing the bearish momentum. It has not tested the trendline coming from the 133.15 high from 4/2. If this market maintains bearish momentum, we are looking at downside risk toward a pivot area between 126.50 and 127.00.
We will go into a more detailed discussion of the Japanese Yen as well as other currency, equities, bonds, and commodities markets all week long in our Market Intelligence Briefings. Subscribe Today!
Fan Yang CMT is a trader, educator and a Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.0