20 Nov 2013
Flash: USD/JPY targets 101.39 extension, GBP/JPY still at risk - JPMorgan
FXstreet.com (Barcelona) - The Yen looks weak vs the USD but keeps the door open to recover on the crosses - assumption only vaid on GBP/JPY now as EUR/JPY has broken key resistance - , notes Thomas Anthonj, FX Strategist at JP Morgan.
Key Quotes
"While USD/JPY looks fairly bullish after the breakout of the triangle (now support at 99.70), which calls for an extension to 101.39 (int. 76.4 %) and to 103.74 (last top), we still see fairly high setback risks in GBP/JPY and in EUR/JPY as long as key-resistance zones between 162.22 and 163.11/164.41 (Fib.-projection/2009 high/int. 38.2 %) - still valid - and at 135-48/49 (last top/daily triangle) - invalid assumption now - are not taken out."
"Only above we'd see room for a straight extension to 177.41 (Fib.-projection) and to 138.35/139.14 (Fib.-proj./2009 high). A re-break below 99.70 in USD/JPY or a break below 160.16 (minor 38.2 %) in GBP/JPY would in this context be seen as strong warning signal that an intermediate JPY recovery could be looming. A minor 38.2 % retracements at 156.20 in GBP/JPY and previous lows at 129.31 and at 127.96 in EUR/JPY would be minimum targets for such an intermediate JPY recovery."
Key Quotes
"While USD/JPY looks fairly bullish after the breakout of the triangle (now support at 99.70), which calls for an extension to 101.39 (int. 76.4 %) and to 103.74 (last top), we still see fairly high setback risks in GBP/JPY and in EUR/JPY as long as key-resistance zones between 162.22 and 163.11/164.41 (Fib.-projection/2009 high/int. 38.2 %) - still valid - and at 135-48/49 (last top/daily triangle) - invalid assumption now - are not taken out."
"Only above we'd see room for a straight extension to 177.41 (Fib.-projection) and to 138.35/139.14 (Fib.-proj./2009 high). A re-break below 99.70 in USD/JPY or a break below 160.16 (minor 38.2 %) in GBP/JPY would in this context be seen as strong warning signal that an intermediate JPY recovery could be looming. A minor 38.2 % retracements at 156.20 in GBP/JPY and previous lows at 129.31 and at 127.96 in EUR/JPY would be minimum targets for such an intermediate JPY recovery."