There's no doubt EURJPY is getting ready for a big move one way or the other as this wedge forms on the 4 hour chart. The question becomes which way? This pattern is getting very tight and ready to break BUT most likely won't happen until the BOJ announcement. We may see a break prior to the BOJ but I would be skeptical as it could be a false breakout. It all depends on the BOJ, definitely watch this pair.
Looking at USDJPY, you can see what appears to be a very clear downtrend alongside a 200-DMA (currently at 109.20), Ichimoku Cloud, and Andrew’s Pitchfork (purple).
The impressive move higher is still taking place within a larger downtrend, which the various indicators on the chart above show you. Of the three indicators, Ichimoku Cloud would be one of the first to register a Bullish signal on a break and close above 105.20 (the lower flag). The next breakout of a long-term indicator would be a daily break and close above the 200-DMA (currently at 109.20), which you can see in the chart below has provided a good bias for longer-term trends.
Lastly, the Andrew’s Pitchfork (purple) would not concede that Bear Run is likely over until a break above the upper parallel line that aligns nicely with the 38.2% retracement of the 12-Month Range at 109.20 (the higher flag).
One more thing, the down move since last Sept has been seen with a slightly up-trending RSI. An RSI which is trending higher while a pair is trending lower often signals a reversal, it's the timing which is the difficult part.
GBPUSD, along with most other foreign leading currency pairs, just experienced a very strong initial leg to the downside which occurred last Friday. There has not been much follow through with 1.306 holding as support since the market opened Sunday evening. If the London session trading can push price below 1.306 and hold downside pressure going into the US session, upticks will be ideal for intraday selling opportunities to capture some quick profits. If downside pressure occurs don't get greedy, 1.3 big figure will likely hold as some solid support.
We will be waiting for the downside momentum to return to GBPAUD before initiating a short position. Look for a break of 1.72700 on the hourly chart, more conservative traders may wait for a close below the 1.72700 level. Targets should be 1.72090 & 1.71800 while your stop should be placed 1.73300 - 1.73600 level.
AUDUSD has broken rising trend line support guiding prices higher since late May against its US namesake, hinting the long-term down trend is resuming. The pair marked a top just below the 0.78 figure and found fuel for a breakdown in relatively hawkish comments from Fed Chair Janet Yellen.
Near-term support is at 0.7496, the 38.2% Fibonacci expansion, with a break below that on a daily closing basis opening the door for a challenge of the 50% level at 0.7415.
Prices are too close to near-term support to justify entering short at market from a risk/reward perspective. With that in mind, a short entry order has been established to sell the pair at 0.7597. If triggered, the position will initially target 0.7496 and than 0.7415. A stop-loss activate on a daily close above 0.7700 - 0.7760.
This trade can be correlated with a Long in NZDUSD but considering we are already in a correlation trade involving AUDJPY & NZDJPY we prefer to trade this pair as a pure directional swing trade.
Obviously with NFP due out this Friday at 8:30 am EST this trade will be greatly impacted by any surprise. With that said we will prefer to liquidate this position, if given the opportunity, ahead of the NFP release.
Over the majority of the month of August the momentum on USDCAD and most other USD leading currency pairs has been to the downside. However within the last week or so the momentum has started to shift to the upside. An inverted head and shoulders pattern has formed between the 1.275-1.285 area which, although a common retail pattern, generally indicates a major turning point in a trend. I would like to see price build up some upside momentum throughout the Asia & European/London session above the 1.292 area and hold above it or as support. If this happens there will be a good buying opportunity at the start of the US session with a stop around the 1.285 level and an upside objective of around 1.3.
NZDJPY could see some downside momentum kick in if the 72.850 level is taken out. More conservative traders will look for a close below that level on the hourly chart. Stops should be place above 73.500 while profit targets should be 72.200 - 72.600 levels. This trade, if triggered, could be correlated with AUDJPY.
Momentum to the downside could be building on USDJPY as it forms this triangle. We would prefer to see a close, on the hourly, below the lower trendline before initiating a position but if your more aggressive you can take a short below 99.800. Targets should be 99.500 - 99.000 and stops should be placed around 100.500 level.
AUDJPY has been an overall downtrend on the 1 hour chart over the past couple of months. We suggest waiting for a rebound up near the 77.600 level before taking a short position. This entry will coincide with a resistance area as well as remain within the trend channel. Stops should be set between 78.200 - 78.500 while profit targets should be 76.500 - 77.000, if it were to take our 76.500 it should attempt to make new lows.