Japanese Yen Price Action Setups: EUR/JPY, USD/JPY, AUD/JPY

Japanese Yen Rate, Charts and Analysis:

• the yen It looks vulnerable to further selling pressure after comments from Bank of Japan Governor Ueda. No more pivot hopes?
• The RSI is approaching the overbought zone for all three yen pairs and thus a rebound cannot be ruled out.

Read more: Japanese Yen price action settings: EUR/JPY, USD/JPY, AUD/JPY

Japanese yen wallpaper

The Japanese Yen has seen continued weakness lately as the markets digested the BoJ Governor’s comments, inflation data and wages data which have also improved recently. Inflation data came out very hot on Friday but unlike many central banks they are not guiding policy at this point.

Comments following Governor Ueda’s release further weighed on the Japanese yen. The governor stated that he sees inflation at central banks’ target of 2% in the middle of the current fiscal year while ruling out monetary tightening. Ueda said that any additional tightening in response to the inflation data would only hurt the economy.

Weakness in the yen is likely to continue as other major central banks such as the European Central Bank and Bank of England are still planning to raise interest rates at least once while Fed policy makers have been striking a somewhat hawkish tone. This is in stark contrast to Fed Chair Jerome Powell who on Friday signaled a dovish note in his comments.

Price actions and possible setups

EURJPY

Euro / Japanese Yen daily chart

Source: TradingView, prepared by Zain Fouda

EURJPY continued its bullish rally today after a brief pause and consolidation on Friday. Today we rushed upwards within a sharpe from the psychological level of 150.00.

It will be interesting to see what reaction we get from the psychological level here if any, with the acceptance above leading towards a retest of recent highs around 151,600. I see no reason here to fight the overall upside and would look at any pullbacks as potential longs. The RSI is approaching an overbought condition on D and might be worth watching but I would expect the bullish trend to continue for now.

Key levels to watch out for:

Support levels:

resistance levels:

US dollar / Japanese yen

US dollar / Japanese yen daily chart

Source: TradingView, prepared by Zain Fouda

From a technical perspective, the daily chart of the USD/JPY pair looks eerily similar to the EUR/JPY pair. This is the theme across the JPY pairs given last week’s rally as you will no doubt see it soon when you take a look at the GBP/JPY. The RSI on USD/JPY is a bit closer to overbought territory then EUR/JPY and can be watched for a potential top in the current rally.

For the time being, we are still in the strongly bullish area, with Friday’s decline making us circle the support provided by the 200-day moving average at 137.15. The daily candlestick today is on its way to print a bullish engulfing candlestick pattern, which may indicate the continuation of the bullish trend. The psychological level of 140.00 is the first area of ​​interest before the big swing level on November 22nd near 142.00 becomes a focus area.

GBPJPY

GBP/JPY daily chart

Source: TradingView, prepared by Zain Fouda

The GBP/JPY chart is still very bullish on higher timeframes with a golden cross on the weekly chart highlighting the momentum even more. We are getting some UK data this week in the form of UK inflation which might add some volatility.

Just like USD/JPY and EUR/JPY, we are seeing almost identical price action over the last 5 days or so. The forward trend remains strong, and it will take a brave soul to confront it for now. It seems that both technical factors and fundamentals in general support the bullish narrative.

We are starting to see some signs that GBPJPY could rebound with a pullback to 170.00 before the upside continuation is not out of the question with the 50 day moving average at 169.80 likely coming into play.

— Written by Zain Fouda L DailyFX.com

Connect with Zain and follow her on Twitter: @tweet