USDJPY Analysis June 2015 (D,W,M,Y)
Created on Monday, 01 June 2015 06:16
Written by Austin Galt
Price has traded as expected since the recent article, USDJPY Set For New Highs, so let’s now take a look at what is expected going forward over both the shorter and longer terms.
USDJPY DAILY CHART
We can see the recent run higher has been parabolic in nature which is commonly found at important tops. I think price will trade a bit higher before an intermediate top is put in place.
The Bollinger Bands show price clinging to the upper band which is normal for a parabolic move higher.
There are some signs that this move is reaching its conclusion and these are from the lower indicators.
The RSI is well into overbought territory so a correction has to be just around the corner while the MACD indicator shows the averages have diverged so a minor pullback at the leats would bring them back together.
USDJPY WEEKLY CHART
The PSAR indicator has a bullish bias with the dots underneath price.
The Bollinger Bands show price is currently trading well above the upper band so a solid top appears imminent.
I have drawn a Fibonacci Fan which shows the recent low was at support from the 38.2% angle and price now looks headed back up to test the resistance from the 23.6% angle. This is where I think price will top out at.
The RSI looks set to show a triple bearish divergence at this high which often leads to a significant decline and that is my expectation here.
The MACD indicator has just made a bullish crossover but I suspect this will be fleeting as it is not in a strong position after recently trending down. Also, a bearish divergence looks set to accompany this coming high.
After this expected high I am looking for a big correction that tests the support from the January 2014 high at 105.73 and is denoted by the horizontal line. Old tops often provide support in the future and I expect that to apply here.
Also, later this year the 76.4% Fibonacci Fan angle will be just under this support level and that is where I expect the pullback low to form.
USDJPY MONTHLY CHART
The RSI looks set to show a triple bearish divergence at this coming high while the MACD indicator looks to be threatening a bearish crossover.
The Bollinger Bands show price has move away from the upper band is now appears to be having one last lash at getting back to it. I expect this attempt to fail.
I have drawn a horizontal line denoting the June 2007 high at 124.14 and price is now in the process of clipping this level. This will run some stops and see some short covering which should be the final phase of this leg up.
I have drawn a Fibonacci Fan from the August 1998 top and price is now just below the 76.4% angle. I think price can push up a bit higher to challenge this resistance which I expect to hold and see price turn back down.
After the pullback, I expect one final run higher. Where is the final high likely to be?
I have added Fibonacci retracement levels of the move down from August 1998 high to October 2011 low and I am looking for price to top out around the 76.4% level which stands at 130.63. I expect a touch higher.
USDJPY YEARLY CHART
The Stochastic indicator shows the averages have diverged quite a lot so a pullback now looks in order which would see these averages come back closer together.
The Bollinger Bands show price flew through the middle band and now has the upper band in its sights. I think price will test the support of the middle again before having a real crack at the upper band. The middle band is currently around 104.
The PSAR indicator has a bearish bias with the dots above price and price now looks headed up to test that resistance. The dots currently stand at 135.77 and should be around 133.90 next year. Price may bust this resistance and if so I expect it to be a fake out play before price reverses and heads back down.
Price is now around the level of the 2007 high while I expect price to eventually make a bearish double top with the trend with the 2002 high which stands at 135.16.
I have added the same Fibonacci retracement levels shown in the monthly analysis just to get another perspective. My target for final high is somewhere in between the 76.4% and 88.6% levels. Let’s see.
For now, a serious correction looks imminent before the expected move to final highs takes place.