1. CADJPY
2. CHFJPY
3. NZDJPY
CADJPY CAD/JPY broke above the resistance line from the triangle that has persisted since 12/6/05. The consolidation from December followed an eight month uptrend and the break above the triangle gives scope to a resumption of the long term uptrend. Additional evidence that the consolidation is complete is the fact that the triangle was 5 waves a common property of triangles, and that the last 4 weeks have seen the pair bounce above and distance itself from both the 40 week and 20 week SMAs. The pair has retraced a bit from todays 104.26 high and additional support rests at the 38.2% fibo of the 101.34-104.26 bull wave at 103.15 and the 61.8% fibo at 102.46. A bullish bias remains above the 6/8 high of 102.40 but a below suggests that the break above the triangle was false.
CHFJPY CHF/JPY broke through its own short term (from 4/19) triangle last week and subsequently fell back 108 pips before mounting another rally the last two days. The pair does not appear as bullish as CAD/JPY due to negative divergence with oscillators at last weeks high (93.31) and the long wicks above the bodies of the weekly candles. The pair actually trades in a much larger, 3 year triangle (bold lines). With the proximity of the upper end of the triangle, risk can be significantly limited to the upside. On the other hand, the long term trend is up and thus possibility remains for a break to the upside. In such an event, the 61.8% fibo of the 116.09-58.83 August 1990-September 2000 downtrend is exposed at 94.11.
NZDJPY Kiwi also has gained against the Yen and broke through a downward sloping channel but since retraced the gains and currently tests that same downward sloping line but now as support. Also evident on the daily is an inverse head and shoulders reversal pattern. The right shoulder is possibly forming right now. A decline back into the downward sloping channel encounters support at the 6/2 low of 70.09. Resistance going forward is at yesterdays high of 72.35. In the shorter term a continued bounce from the 61.8% fibo of the 70.09-72.35 bull wave at 70.96 is favored as RSI is rising above 30 on the hourly.
Glossary of Terms
CCI(20) 20 day Commodity Channel Index
> 0 bullish
0 > bearish
> 100 extremely bullish
-100 > - extremely bearish
RSI(14) 14 day Relative Strength Index
> 50 bullish
50 > bearish
> 70 overbought
30 > - oversold
MACD ? - MACD slope (MACD MACD[1])
> 0 bullish
0 > - bearish
Mom(8) 8 day Momentum (shorter-term direction)
> 0 bullish
0 > - bearish
ATR(14) 14 day Average True Range (volatility)
Medium 75th percentile* > ATR(14) > 25th percentile*
High - > 75th percentile*
Low 25th percentile* >
ADX(14) 14 day Average Directional Index (directional strength)
> 30 strong
30 > - weak
*measured against past 3 months
