Technical Analyst, Saxo Bank
Summary: JPY crosses bouncing strongly following last week’s sell-off. Uptrends could resume but keep an eye on support levels
USDJPY has bounced strongly from strong support at around 141.55 currently testing the 0.786 retracement at 146.24 of last week’s sell-off.
The bounce could continue to test resistance at around 147.50
RSI is at the time of writing breaking above its falling trendline and above 40 threshold suggesting the sell-off in USDJPY is done. RSI is however, still in negative sentiment also pointing to lower levels. USDJPY is truly in a bit of a limbo
If USDJPY is closing above 147.50 a move to key resistance at around 149.75 and 0.786 retracement is in the cards. A close above 149.75 will confirm bullish trend with potential to take out 151.95 peak.
However, there is strong overhead resistance with the 55 DMA coming down and the Cloud area laying just above the 147.50 level. If USDJPY is sliding back below 144.75 the support at around 141.55 could come under pressure
EURJPY spiked below 200 DMA to the support at around 153.08 to bounce to close back above 155.52. The rebound is continuing today with EURJPY testing the rising trend line from underside and the resistance at around 157.70. a close above 157.70 could extend the rebound to the 0.618 retracement at around 159.67.
A close above 159.70 the uptrend has resumed.
However, RSI is still showing negative sentiment and no divergence suggesting the bearish move could resume. If EURJPY is breaking back below 155.50 the 153.08 support is likely to come under pressure once again, and likely taken out
AUDJPY bounced strongly from just above the 200 DMA and support around 93.58.
Currently above the Cloud and if EURJPY closing above 96.10 further upside to the 0.618 at 96.68 and even to the 0.786 retracement at 97.50 could be seen
If AUDJPY is sliding back below 94.90 downtrend is resuming and could test the 93.58 support once again. IF that scenario plays out expect a move down to 92.80
GBPJPY has bounced back above the Cloud (Shaded area) and the 110 and 55 DMA’s. The bounce seems likely to continue to the 0.618 retracement at around 184.80 and resume uptrend.
If closing above 184.80 a move to previous peak around 188.80 is in the cards.
If GBPJPY is sliding back below the Cloud support at 181.07 is being testing. A close below downtrend is resuming with a potential bearish move to 176.25 2024: The wasted year
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Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.