CADJPY
CHFJPY
NZDJPY
Commentary – Our last Yen crosses article mentioned that “with the appearance of 5 waves down from 125.55 (which we are labeling large wave 1), we expect a larger wave 2 correction to test the 50% and maybe the 61.8% at 116.71 or 118.79 over the next month.” On 12.27, the CADJPY topped at 116.83, just pips from the mentioned 50% retrace level. The decline from there is an impulse, indicating that the additional bearish potential remains. However, expect a rally near term to complete a small second wave. Resistance is above 111.11 at 111.86 and 112.81 (Fibonacci levels). Long term objectives for the CADJPY are at 99.16 and 88.23.
Strategy – Bearish, against 116.83, target TBD
Commentary – Our last Yen crosses article mentioned that “the CHFJPY appears to be completing a triangle. Triangles are continuation patterns and the previous trend was up so we expect the break to occur to the upside. We expect a terminal thrust higher to complete wave B in a larger A-B-C correction from 101.85.” As it happened, the CHFJPY completed its terminal thrust at 12/28 at 100.32. The pair is headed lower, possible below the August low of 92.15 in the coming months.
Strategy – Bearish against 100.23, target TBD
Commentary – A triangle is close to ending, but is the triangle bullish or bearish? It could be either. The bearish labels are in black and the bullish labels are in red. If a bearish triangle is unfolding, then price will rally towards the upper resistance line before beginning a bear leg that brings price below 74.25. If the triangle is bullish, then price has already bottomed at 82.94 and break through 91.42 will occur in the next few months. Strategically, it makes sense to get bullish now (since risk is close) and simply move to breakeven after a rally occurs towards the upper end of the triangle line.
Strategy – Bullish now, against 82.94, target above 91.42 (move to breakeven after a rally through 86.50)
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