YEN Stronger GBPJPY and CADJPY both hit Target

GBPJPY, Daily              

The YEN has gained over night on what is being interrupted as a relatively upbeat statement from the Bank of Japan. The “Summary of Opinions” from last week’s BOJ meeting before the official minutes are published suggested a fairly positive meeting and outlook.  They noted that exports had risen, the JPY has fallen, the global economy is looking better and the US economy may “accelerate further under new president”. Local consumption has improved and Japan was at a “critical juncture” to achieve price target.  The YEN rallied across the board and two of my LONG JPY positions hit Target 1 for a net gain of 372 pips.

I wrote last week (December 21) that; The GBPJPY looks vulnerable for a pull back, the strong rise during November and December may have peaked with what appears to be a pivot high and shooting star at 148.46. Monday’s (December 19) strong move down absorbed the five previous day’s energy.  A SHORT position was entered today at 145.50 with Target 1 at 143.00 (the confluence of the 14 DATR, the 200 DMA and the 23.6 Fibonacci retracement level) and Target 2 at the 38.2 Fibonacci level and psychological 140.00.  The MACD and RSI are suggesting further weakness. However, the pair remains north of the 20 DMA at 144.00 which could provide short term resistance to the move lower and the Parabolic SAR is still positive.


The following day (December 22) I wrote ; The JPY continues to look interesting and I have entered a further (and final) JPY LONG position. This time it is a short CADJPY. Entry was at 87.56 with a Target 1 at 86.34 (20 DMA support area, 14 DATR and above the 23.6 Fibonacci level). This position is against the longer Weekly and Monthly trend which have both turned positive. However, the daily chart shows bearish MACD, RSI and Parabolic SARS. Target 2 at 84.84 is above the 38.2 Fibonacci retracement due to the longer term trend change.


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Stuart Cowell

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