On Tuesday, the Japanese currency (JPY) strengthened against most of its major counterparts on safe-haven buying as credit rating agency Fitch warned of Greece sovereign rating downgrade on the back of political uncertainty. On Thursday, however, JPY lost some weight against GBP and CAD while continued strengthening against EUR. Investors now await for the first major releases of 2015 pertaining to the manufacturing sector from the US and other parts of the global economy.
ALSO READ: Manufacturing PMI Data In Focus
Given the backdrop, here is a technical update on JPY cross currency pairs - EURJPY, GBPJPY and CADJPY.
The pair is trading very close to 145.00 round figure mark, also coinciding with 50-day SMA region. A break below 50-day SMA is more likely to accelerate the fall immediately towards 143.80-60 support area, marked by 38.2% Fib. retracement level of Oct.-Dec. 2014 up-swing. Moreover, a decisive break below 38.2% Fib. retracement level seems to open room for further depreciation towards testing 142.00 support area, marked by 50% Fib. retracement level. Alternatively, a bounce from 50-day SAM support is likely to confront an immediate resistance near 145.90-146.00 zone, marked by 23.6% Fib. retracement level. However, major upside resistance is pegged near 147.00-147.10 horizontal area, which if conquered seems to pave way for continuing upward trajectory towards 150.00 psychological mark resistance and eventually towards 151.80-152.00 resistance area.
Following a retest of 23.6% Fib. retracement level support of Oct. to Dec. 2014 up-move, the pair rebounded and is now trading very close to its immediate resistance near 186.40 level. A move above the immediate resistance is likely to confront with a major resistance near 187.20-40 area, which if cleared seems to have the potential to lift the pair, beyond recent highs and 190.00 round figure mark resistance, towards 192.50 resistance area. Meanwhile on the downside, drop below 184.60-50 support, seems to accelerate the fall towards its intermediate support at 50-day SMA, currently near 183.50-30 region. Furthermore, decisive weakness below 50-day SMA is likely to drag the pair back towards retesting 38.2% Fib. retracement level support near 181.50-30 zone.
Following a sharp rebound from nearly 99.00 level, the pair has been facing some resistance in moving above 104.00 mark. However, immediate downside is also protected by 50-day SMA, currently near 102.00-10 region. Hence, till the time it either clears 104.00 mark or breaks below 50-day SMA support, the pair seems to trade within this broad trading range. Decisive weakness below 50-day SMA seems to take the pair back towards retesting sub-100 level, marking 50% Fib. retracement level support of Oct.-Dec. up-leg. Alternatively, strength above 104.00 mark is likely to boost the pair further towards its next horizontal resistance near 105.20-40 area.
Senior Market Analyst
At any use of the analytical material taken from the site of company Admiral Markets, and the secondary publication on any other resources, the rights to intellectual property for a dealing center «Admiral Markets», reference to the company site is obligatory.
Follow @Fx_Haresh on twitter for latest market updates