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Yen Technical analysis against the US$ and Euro

Technical Analysis of Yen:

From a technical analysis perspective, we see that against the Euro as well as US$ the appreciation of the Yen has followed a very similar path commencing middle of 2012 with Euro peaking a little later than the US$ during mid-2015.  A very similar corrective WXY pattern has ensued against both the Euro and the US$ ever since.  On the side of the price rally the difference lies only that the euro 5th wave unfolded as an extension and was more long drawn.  Further once the US$ started routing the Euro commencing 2015, the Yen correction against the greenback was more severe as opposed to the Euro and already it has retraced more than 61.8% Fibonacci level, and the next move is reaching the 78.6% Fibonacci retracement level which is not a long shot.  Accordingly, the retracement has only been 50% against the greenback, primarily because it has performed better than its counterpart Euro over a similar time horizon.  Reviewing at the PNF charts we see that primarily all targets have been reached against the Euro when it was appreciating as well as surpassing the target when Euro has remained rather weak commencing 2015.  The same is the case with the US$, although the path to reaching a downward price target of parity 100 has been rather slow, but it appears to be the next point of threshold.  We already see a point of hesitation emerging against the US$ at the current level of 50% retracement.  Going forward there is a chance of the detachment of the similar charting pattern that we have witnessed of Yen against both Euro and US$.  Euro can threaten to break free, whereas there are ominous signs for the US$ to depreciate in the aftermath of the US general elections.

However, from a technical analysis perspective the Y wave of the WXY corrective pattern has already retraced further by 3.618 against the first corrective wave pattern W and its seems rather implausible that it should go further down.  That can only happen at a point in time when fundamentally the US economy is in a weak condition, which does not seem to be the case.  So possibly going forward we would witness a drop down to 97 USDJPY parity level, before we start seeing a reversal path that would allow for the US$ to keep strengthening till middle or end of 2017 before impact of recession start settling in.  Probably by that time Euro would have gained enough momentum for it to continue strengthening.

Going forward we see Dollar making a comeback against the Ye as would the Euro, but the extent of dollar appreciation would be limited.

Yen technical analysis

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