• The British pound initially pulled back during the trading session on Friday to test the crucial 1.25 level.
• The 1.25 level of course is a large, round, psychologically significant figure that a lot of people will be paying attention to, as it has been important multiple times. Now that we have bounce from there, it does suggest that perhaps we are going to continue to see a lot of momentum to the upside, and of course perhaps go looking to the moving averages above.

That being said, I also recognize that this is a market that will continue to be noisy, especially as the Monetary Policy Committee had two of its members vote for an interest rate cut this past week, so that does put a little bit of negativity into the British pound, but on Friday we have the market reacting to the University of Michigan Consumer Sentiment numbers coming out much lower than anticipated, and this course has people already starting to try to price in the idea of the Federal Reserve cutting rates. This of course is nonsense, but it was the catalyst on Friday.

• 

Choppy Conditions Ahead

I suspect that we are going to continue to see a lot of choppy action in this pair, as well as the rest of the Forex world, as people simply have no idea where to price risk at the moment. Ultimately, the Federal Reserve is going to stay tighter for longer, despite the fact that we did see a crack in consumer confidence. Quite frankly, it’s going to take a lot more than that to get the Federal Reserve to start moving again.

In the short term, we have the 200-Day EMA and the 50-Day EMA just above, and then of course we have resistance near the 1.26 level. Any signs of exhaustion in that area would probably get jumped upon, as a potential shorting opportunity. If we can break above there, then the market could very well find its way back to the 1.27 level above. That being said, it’s going to be noisy regardless and you have to keep an eye on the fact that any geopolitical tension almost always favors the US dollar anyway.

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I wrote on 5^th May that the best trade opportunities for the week were likely to be:

1. Long of the AUD/JPY currency cross. This gave a win of 1.21%.
2. Long of the CAD/JPY currency cross. This gave a win of 1.97%.
3. Long of the CHF/JPY currency cross. This gave a win of 1.69%.
4. Long of the EUR/JPY currency cross. This gave a win of 1.90%.
5. Long of the GBP/JPY currency cross. This gave a win of 1.68%.
6. Long of the NZD/JPY currency cross. This gave a win of 2.00%.

The overall result was a net win of 10.45%, resulting in a win of 1.74% per asset.

The last weeks saw lower volatility in the Forex market.

Last week’s key takeaway was the souring of risk-on sentiment due to expectations in the USA of higher inflationary pressure over the short-term as well as US Consumer Sentiment data which came in at a six-month low.  This souring did not come until the end of the week, and it is unclear how negative it is, as most assets over the entire week showed a risk-on rally.

It is unclear what sentiment will be like as the new week gets underway. It is likely that markets will be so fixated on the upcoming US CPI data release that nothing much will happen in the market before that.

The two major data releases last week were policy meetings at two central banks: the Bank of England and the Reserve Bank of Australia. Both central banks kept their interest rates unchanged, but the Bank of England vote was a little more dovish than expected. The RBA stated that inflation risk remains to the upside but that on balance they considered another rate holding to be the correct action. However, both banks effectively indicated a rate hike was out of the question.

Other important data releases were:

1. US 30-Year Bond Auction – this produced a slightly lower yield, which should be slightly bullish for risk.
2. UK GDP – this came in notably better than expected, with a month-on-month increase of 0.4% instead of the expected 0.1% increase.
3. US Unemployment Claims – this was slightly worse than expected.
4. Canadian Unemployment Rate – this was better than expected, with the unemployment rate remaining unchanged at 6.1% due t the creation of more net new jobs than was expected.

• 

The most important item over this coming week will be the release of US CPI (inflation) data on Wednesday. Apart from that, there are several other important releases scheduled, listed in order of likely importance:

1. US PPI
2. US Retail Sales
3. US Empire State Manufacturing Index
4. US Unemployment Claims
5. Australia Wage Price Index
6. New Zealand Inflation Expectations
7. UK Claimant Count Change
8. Australia Unemployment Rate

As May got underway, the long-term trend in the US Dollar was still unclear, so I made no monthly forecast.

Last week, I forecasted that the Japanese Yen would decline against the Euro, Pound, New Zealand Dollar, Swiss Franc, Canadian Dollar, and Australian Dollar. All of these were excellent winning trades, giving a large overall gain of 10.45%, as outlined earlier.

Directional volatility in the Forex market decreased last week, with 27% of the most important currency pairs fluctuating by more than 1% last week.

Last week, the Australian Dollar showed relative strength, and the Japanese Yen showed relative weakness.

You can trade these forecasts in a real or demo Forex brokerage account.

The US Dollar Index printed a small inside candlestick last week which closed slightly higher with a relatively large upper wick, signifying indecision. The candlestick is close to being a bearish pin bar. There is no true long-term trend here, as the price is above its level from 3 months ago but remains below its price of 6 months ago, making the US Dollar relatively unreliable to trade on a trend basis.

The weekly price chart below shows that the dollar has been swinging but has been in a consolidation pattern for quite a while, and the consolidation seems to be getting stronger and constricting.

However, it is worth noting that there is a confluence of a bearish descending trend line and a key horizontal resistance level at 105.81 which is not far from the current price. If the Us Dollar can get established above that level, it could be a significant bullish breakout. It could happen this week if the release of US CPI (inflation) data is notably higher than expected.

I expected that the GBP/USD currency pair would have potential support at $1.2449.

The H1 price chart below shows how this support level was rejected right at the start of last Monday’s London / New York session overlap by a bullish doji, marked by the up arrow in the price chart below, signaling the timing of this bullish rejection. This was then followed by an inside candlestick, which broke bullishly during the next time period. This can be an excellent time of day to enter a trade in a currency pair which involves the US Dollar such as this one.

This trade has been somewhat profitable, with the maximum reward-to-risk ratio reached so far depending greatly upon the positioning of the stop loss. If only the inside candlestick was used for the stop, the trade would have had an OK ratio.

The USD/JPY currency pair was active this week, as were all the Yen crosses. This is due to volatility remaining within the Japanese Yen after its recent massive price movements, with the volatility goosed by two suspected interventions from the Bank of Japan.

The Yen is weakening everywhere, and so of course it also weakened against the US Dollar. However, several other currencies gained even more against the Yen last week.

Technically we see the bullish momentum starting to evaporate into a consolidation below ¥156.00.

Yen weakness is quite likely to persist over the coming week. Whether this is the best pair to use to be short of the Yen is debatable. However, if the Yen does stay weak, long trades from bounces at support levels in this currency pair are likely to be good trades.

The price of Gold rose quite firmly last week, printing a bullish engulfing candlestick of good size, although Friday saw Gold give up some of its gains through a short-term topping out. The weekly price chart below shows some upper wick on the weekly candlestick. However, the price closed notably higher, and is not very far from making a record high weekly close, which was last made 4 weeks ago at $2392.

We do not yet have bullish breakout conditions, but long trades do look more likely to succeed than short ones, and there is certainly a long-term bullish trend here.

I think we could see a good point to enter a new long trade if we get either:

• A daily close above $2400, or
• A retracement to any of the support levels above $2290.

The price of Silver rose quite firmly last week, printing a bullish engulfing candlestick of good size, although Friday saw Silver give up some of its gains. The weekly price chart below shows some upper wick on the weekly candlestick. However, the price closed notably higher, and is not very far from making a record multi-year high weekly close, which was last made 4 weeks ago at $28.69.

We do not yet have bullish breakout conditions, but long trades do look more likely to succeed than short ones, and there is certainly a long-term bullish trend here.

I think we could see a good point to enter a new long trade if we get either:

• A daily close above $29, or
• A retracement to either of the support levels at $27.72 or $27.46, with $27.46 looking especially strong due to its confluence with $27.50.

After major US equity indices dropped quite sharply 4 weeks ago after making new all-time highs, US stock markets have been rising slowly but surely, and last week saw quite good performances, especially here in the broad, benchmark S&P 500 Index. It is worth noting that this Index outperformed the NASDAQ 100 Index, which is unusual in a bear market and suggests that the tech sector currently has some vulnerability.

The weekly price chart below shows a bullish candlestick that closed quite near its high. There was some upper wick, but nothing unduly large for bulls to worry about.

There is clearly a long-term bullish trend coupled with mostly bullish short-term momentum. The issue for bulls here is likely to be that the price is near the recent record highs which could provide resistance and trigger another bearish reversal if reached.

For this reason, I will only consider entering a new long trade here if we see a new record high daily close. I prefer a daily close above 5265 which would be a new record high.

We have seen renewed risk-on sentiment in recent days, which is benefiting stocks and precious metals. Gold and silver are positively correlated with stock market performances historically.

I see the best trading opportunities this week as follows:

1. Long of the S&P 500 Index following a daily close above 5265.
2. Long of Gold following a daily close above $2400.
3. Long of Silver following a daily close above $29.00.

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GBP/JPY Forecast Video for 22.02.23

British Pound vs Japanese Yen Technical Analysis

The British pound has taken off against the Japanese yen during trading on Tuesday, breaking above the crucial ¥162.50 level. We had been bouncing around for a while, and trying to figure out whether or not we can break that area. We finally got our answer on Tuesday, and now it looks as if this market is going to do everything it can to take off to the upside. Ultimately, this is a market that is probably reacting to PMI numbers coming out of the United Kingdom, as a finally gave it an excuse to rally. While they were great, they weren’t nearly as bad as people had anticipated.

It’s also worth noting that the Bank of Japan and its yield curve control continues to hamper the growth of the Japanese yen. After all, keeping the 10 year JGB down to 50 basis points will be an issue, and something that will cause a lot of pressure to be found against the Japanese yen as the Bank of Japan will have to print currency to buy those bonds. In other words, the market is simply flooded with Japanese yen at the moment, and it appears that the Bank of England is likely to remain rather hawkish in the meantime, as inflation and employment are both more resilient in the United Kingdom than originally thought.

When you look at the structural set up, we had been bouncing around and forming a bit of a bottoming pattern, and now it looks like we finally are ready to take advantage of it. It’s very likely that this market could go looking to the ¥165 level above, which is the next major barrier. We’d seen quite a bit of selling pressure in that area, so I think it does make certain amount of sense that we would try to see whether or not it holds on the way back up.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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Hello traders. Welcome to this technical blog post where we will delve into the (EURJPY)  currency pair. By the end of this post, you should have a clearer understanding of the path EURJPY Elliott wave analysis is following and how you can participate in the upcoming significant movement on this pair. So, please join me on this journey.

If you’ve been keeping up with us on any of our social media platforms or reading our blog posts, you’ve likely come across our bullish outlook for Yen pairs, as illustrated in our posts, charts, or videos. We cover a total of 78 instruments, including 7 Yen pairs, among which EURJPY is included.

EURJPY Elliott Wave Analysis – 25th April Weekly Chart Update

Above is the weekly chart we shared with members on 04.25.2024, illustrating a long-term bullish sequence on EURJPY. The chart depicts a super cycle degree impulse wave pattern that initiated in June 2016, following the conclusion of the grand super cycle degree wave ((II)). Consequently, we find ourselves in wave ((III)) of the super cycle degree, with the current position being within wave (III) of the super cycle degree. Looking further, we’re currently in wave III of (III) of ((III)). Based on this analysis, the long-term trend strongly favors the upside.

EURJPY Elliott Wave Analysis – 25th April Daily Chart Update

Now, let’s examine the EURJPY daily chart as of the close of the trading day on 04.25.2024. The  chart above illustrates the sub-waves of wave III. Wave II of (III) concluded at the low in August 2022, and we’re now in III of (III). Additionally, wave III is in its 5th wave – wave ((5)) of III. However, wave ((5)) may have considerable room to ascend before completion, currently progressing in wave (1) of ((5)), which commenced in December 2023. Therefore, throughout 2024 thus far, we’ve maintained a bullish stance on EURJPY. Within wave (1) of ((5)), we’ve been scouting for opportunities to buy pullbacks in 3, 7, or 11 swings, such as the following setup shared with members on 04.13.2024

EURJPY Elliott Wave Analysis – 13th April H4 Update

On 04.13.2024, we shared the H4 chart above with group 1 members. We expected wave 4 of (1) to end between 162.397-160.685 before starting an upward move to finish wave 5 of (1) in a diagonal pattern. As predicted, the price action matched our expectations. The rally we anticipated began right at the upper limit of the extreme zone, hitting 162.24 precisely.

EURJPY Elliott Wave Analysis – 26th April H4 Update

The subsequent H4 chart above, shared with members on 04.25.2024, reveals EURJPY’s advancement from 162.24 with an impulse. Though the H4 wave count has been adjusted to align with current price action, the outcome remains consistent to the upside. Presently, price is in wave (v) of ((iii)) of 3 of (1). With the long-term, medium-term, and short-term bullish sequences remaining intact, there is still considerable upside potential. Moving forward, our strategy remains unchanged. While we disregard selling, we will continue to seek LONG opportunities in pullbacks that conclude within the extreme zone.

Source: https://elliottwave-forecast.com/forex/eurjpy-elliott-wave-analysis-ride-bullish-wave/

• EUR/USD navigates an inconclusive range near 1.0780.
• The Dollar picks up a mild pace ahead of data, Fedspeak.
• Investors continue to assess the policy divergence ahead of US CPI.

EUR/USD struggles to regain impetus after Thursday’s marked advance, while a test of the key resistance area around 1.080 still remains elusive. In the meantime, spot is expected to maintain a cautious trade ahead of the key publication of the flash Michigan Consumer Sentiment for the month of May and speeches by Fed’s Bowman, Barr and Goolsbee.

Around the Federal Reserve, San Francisco Fed President Mary Daly commented on Thursday on the persisting policy restrictiveness, noting the potential need for additional time to bring inflation down to the Fed’s target level. Earlier on Friday, Atlanta Fed President Raphael Bostic hinted at a possible economic slowdown, although the timing for rate cuts remains uncertain.

Still around the Fed, FOMC Governor Michelle Bowman, Chicago Fed President Austan Goolsbee and FOMC Governor Michael Barr are all due to speak.

Meanwhile, the narrative surrounding the monetary policy divergence between the Fed and the rest of its G10 peers continues to dominate the macro scenario in the FX universe.

On this, the FedWatch Tool tracked by CME Group sees the probability of a Fed’s rate reduction in September nearly 70%.

EUR/USD technical outlook

On the upside, EUR/USD is likely to face first resistance at the May high of 1.0812 (May 3), which comes before the intermediate 100-day SMA of 1.0829 and the April top of 1.0885 (April 9). North of here is the March peak of 1.0981 (March 8), which precedes the weekly high of 1.0998 (January 11), all before the psychological threshold of 1.1000.

Looking south, a break of the 2024 bottom of 1.0601 (April 16) might mean a return to the November 2023 low of 1.0516 (November 1). Once this zone is cleared, spot may test the weekly low of 1.0495 (October 13, 2023), which is ahead of the 2023 low of 1.0448 (October 3) and the round level of 1.0400.

 

GBP/JPY Forecast Video for 20.09.23

British Pound vs Japanese Yen Technical Analysis

The British pound has bounced from the 50-Day EMA during the trading session on Tuesday, as it looks like we are continuing to try to figure out where to go next. Ultimately, the Bank of Japan has an interest rate meeting on Friday that a lot of people will be paying attention to, so therefore it’s worth noting that this pair may be volatile. Furthermore, we have to ask questions about risk appetite and where that’s going, as the markets are trying to figure out what to do about interest rate decisions, and of course inflation itself.

All things being equal, this is probably more about the Japanese yen than anything else, so I don’t necessarily pay too much attention to Britain in this equation, at least not this week. If the Bank of Japan can somehow scare the market back down, then it’s possible that the Japanese yen could start to strengthen. However, I’m not holding my breath for this and I recognize that the markets will continue to look at the interest rate differential overall, as it is wide enough to drive a tractor at the moment.

Japan has a major issue, because it has massive amounts of debt that has to deal with, and therefore interest rates are particularly brutal on the Japanese. With that being said, I’m very cautious about getting excited about owning the yen, as I think that this is a longer-term structural problem that Japan has to deal with. In other words, all of that massive debt that the Japanese have taken out is going to continue to cause major issues.

That being said, I think that the ¥185 level above is crucial to pay attention to, and therefore if we can break above that level I think we probably have a situation where the market could really take off. If we break down below the 50-Day EMA, then we could be looking at a move down to the ¥180 level underneath which is a major support level on longer-term charts as well. In general, I anticipate the next couple of days may be noisy, but we may have more clarity after the Friday Bank of Japan press conference.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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USD/JPY Forecast Video for 01.05.23

US Dollar vs Japanese Yen Weekly Technical Analysis

The US dollar initially pulled back just a bit during the course of the week, but then turned around to break above the ¥135 level. By doing so, it looks as if the market is trying to get to the ¥137.50 level, which was a major resistance barrier. That being said, the market is likely to continue to see buyers on dips, more or less based on shorter-term charts. The Japanese on Friday morning in Asia reiterated their desire to keep yield curve control going, at least for the time being, this had the Japanese yen sell off quite drastically.

It’s also worth noting that the Friday session smashed through the top of a shooting star from the previous week, so now it looks like the buyers have completely overrun everything. However, that doesn’t mean that we go straight up in the air immediately, but once we break above the ¥137.50 level, I suspect this becomes more of a “buy-and-hold” type of market, we go much higher to go looking toward the ¥150 level again.

As far as selling is concerned, I don’t have any interest in doing so, at least not until we break back down below the ¥130 level, but that looks to be very unlikely to happen anytime soon. Ultimately, this is a market that I think just formed a massive double bottom, and of course breaking above that ¥137.50 level is a confirmation of that potential signal. Either way, I would anticipate a lot of noisy behavior, but I still think that there’s a lot of upward momentum given enough time.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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• The British pound initially fell during the trading session on Thursday against the Japanese yen but has since turned around despite the fact that there are members at the Bank of England that have voted to cut rates.
• Ultimately, there were to members on the Monetary Policy Committee that voted for cutting rates.
• This would be the first signs of the Bank of England think about cutting rates, but ultimately the interest rate differential between the United Kingdom and Japan is massive, and therefore I think you get a situation where traders continue to hang on to this pair.

• 

The technical analysis for the GBP/JPY pair is fairly straightforward in the sense that we have been in a massive uptrend for months, and of course we have seen the 50-Day EMA act as a trend line quite perfectly since the beginning of the year. In other words, every time we pull back, I’ll be looking to get into this pair is closer the 50-Day EMA is possible. This of course assumes that we are going to pull back, and quite frankly the only reason we did pull back to begin with from the recent swing high as that the Bank of Japan got involved. Regardless though, central bank intervention rarely sticks for the long term, and it certainly doesn’t look like it’s going to here. Remember, the Bank of Japan cannot raise rates too much, or it will absolutely destroy the Japanese economy.

Underneath, I believe that the trend is defined by the ¥190 level, and as long as we can stay above there the trend is very much intact. This does not mean that we go straight up in the air or that it’s easy to get to the ¥200 level, but I think ultimately that’s the target. I will be looking to buy every dip as a potential value plays, as it offers “cheap British pounds” when it comes to the measurement against the feckless Japanese currency. I have no interest whatsoever in trying to short this pair, or anything else denominated in Japanese yen.

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