Japanese Yen Prediction – Net Long JPY Might Drive EUR/JPY, AUD/JPY

JAPANESE YEN TECHNICAL OUTLOOK, IGCS, JPY, EUR/JPY, AUD/JPY – KEY POINTS:

  • EUR/JPY might look to consolidate prior to rising to test the yearly high
  • AUD/JPY looks to nudge to new monthly high after it bounced off the Fibonacci support
  • A significant rise in the weekly net long, JPY positions proposes the haven-linked currency might continue sliding against its major peers.

Technical Prediction for the Japanese Yen – Bearish

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The declining fundamental backdrop had resulted in the retail clients flocking to the haven-linked JPY as the IG Client Sentiment Proposes the immense short positioning in the AUD/JPY and EUR/JPY exchange rates.

Taking into account the fact that the IGCS is considered as the contrarian indicator. This surge in the net long Japanese yen exposure proposes the risk-sensitive Australian dollar and euro might continue climbing against their JPY peers.

Moreover, the bearish signal seems to fully support the latest developments evidenced in the weekly price action as the Japanese index seems poised for the retailed pullback to the 2014 upside trend and the June lows.

JPY Index Chart

Japanese-Yen-Forecast

The JPY significantly deteriorated after it curved the possible Double Top slightly lower than 2016 high, with the February spot low weekly closing temporary domineering selling enthusiasm and amplifying the short-term economic recovery back over the 50 weeks MA.

Nevertheless, the price action failed to fully hold over the trend defining the 50-week Moving Average proposing that the JPY might continue retreating from the yearly highs, with the close under the 38.2% Fibonacci possibly approving the Double Top reversal and ignite the sustained pullback to key support in the February low.

Japanese-Yen-Forecast-Net-Long

Japanese-Yen-Forecast-Net-Long

Japanese Index Daily Chart

The outline on the lower time frame reiterates the bearish outlook seen from the week’s vantage point, as the downside extends from March highs continue to chaperone the Japanese yen index lower.

An array of daily closes under the sentiment defining the 200-day MA hints at additional losses as the relative strength index started to dive in the bearish zone below 40.

The entry of this relative strength index into overbought will possibly result in the accelerating decline with the main regions for support falling at the February and June lows.

If this eventuates, the EUR/JPY and AUD/JPY rates might continue outperforming and possibly rise above to re-test the yearly extremes as indicated by Japanese Yen Strengthens Despite Bearish FY Economic Forecast.

Japanese-Yen-Forecast-Net-Long Chart

Japanese-Yen-Forecast-Net-Long-JPY-Bias-May-Fuel-AUDJPY-EURJPY

AUD/JPY CHART – EYEING RE-TEST FOR YEARLY HIGHS

The AUD/JPY rate continues trading in the tight 100-point range, as the buyers are not able to overcome the key resistance at 75.09, June high.

Having said that, the channel for the least resistance seems to be on the uptrend as the price action hug the upside trend extension from 64.39 April high after it bounced off support at the 74.16 Fibonacci (61.8%).

Nevertheless, the momentum indicator that significantly fades back to the neutral midpoint might hamper the AUD/JPY’s attempts to clear the key resistance.

However, the need to test the 2019 December high might be on the loathing, as the relative strength index retains the constructive trend and continue climbing to the overbought zone.

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