Forget about safe haven, JPY is all set to go down

Yen weakness contrary to expert opinion?

Safe haven has been the buzz word among traders, specially after the Brexit polls. Gold, silver, other precious and non-precious metals, commodities and the Japanese yen were supposed to be ‘safe haven’ instruments. Just one month after the Brexit polls, JPY is looking extremely bearish.

May be the “people” were referring to the JPY as a safe haven in a long term investment perspective. Regardless, as a trader, I will always look to go against the herd, everytime. However, that does not mean my trades are always counter trend. If you have been around for a while, then you know that significant trends often commence against the herd.

Disclaimer: these are not trading ideas nor signals. Just my opinion on JPY pairs.

USDJPY

usdjpy

It seems there may be a pullback – a corrective structure before price really takes off. Of course the bullish move is not confirmed until the structural trendline is violated. But so far the bearish trend is not impulsive in the context of higher magnitude – specially in the Daily and Weekly charts.

EURJPY

eurjpy

Looking at the Euro-yen weekly chart, its a similar corrective pattern to dollar-yen, which has so far retraced more than 61.8% of the previous bullish impulse. I would like to remind you that this is not a trade-call or any sort of encouragement for you to buy euro-yen. On the contrary this is a long term view to analyze the general direction of the yen.

If almost all yen crosses are looking to break to the upside, what would be the fate of JPY? Food for thought. These are just warning signs which strongly indicate that no trader should follow the crowd. Specially when renowned economists, financial TV channels and so called “gurus” feed you information about “safe havens.”

AUDJPY

audjpy

Probably, you too see the same patterns and indications. Let alone Elliott waves and wave counts, there will be many traders who would have the exact opposite opinion. Many more to argue that the trend is bearish. I agree that the trend is bearish. But its also corrective in nature. In the context of daily and weekly timeframes, price is somewhat in a range. Ok, there is a slight tilt of the structure to the down side. But bearish momentum is certainly dying. Remember, there may be plenty of opportunities to short the AUDJPY in lower timeframes. But for the purpose of this post, we are analyzing the markets to spot the “next big move” of the JPY and all JPY crosses.

NZDJPY

nzdjpy

Kiwi-yen does not need an explanation as to why another impulse up is expected. If you have some experience with Elliott waves principle; specially corrective wave patterns, then you probably know where the market is heading. However, the only problem is that no one knows – when the bullish impulse will start or why. But it will for sure. At least, that is what the wave patterns predict.

CHFJPY

chfjpy

Do they all look similar in structure? Because all of them are. Swiss-yen too is in a nice looking channel. When all yen pairs are in either a bull-flag or a bearish, corrective-channel; it means that the Japanese yen is at a vulnerable situation.

CADJPY

cadjpy

Cad-yen too is looking bullish in the weekly chart.

So that covers all major yen crosses. If you have been paying attention, Pound-yen is missing in the above list. I have saved GBPJPY for the last, because its the only pair that does not currently have a similar structure to forecast a bullish wave. Mind you, it also could do the same and move up for a bullish impulse. Just that its not apparent as of yet in the charts. So Pound-yen is a neutral in the context of yen weakness. However, the Elliott wave analysis of the Pound-yen forecast a further impulsive decline.

GBPJPY

gbpjpy

Perhaps a prolonged sideways move to follow the end of wave 3. Assuming the wave 3 is in progress, GBPJPY is likely to continue down.

Some general notes:

  • The charts shown here are only to analyze yen weakness and to expect a possible sell-off in the near future
  • No correlation is considered here. Because, even if all yen crosses move in the expected direction, not all the markets will move in the same direction at all times. Similar to the bearish correction in most of the yen pairs as discussed above.
  • Yen weakness or expected weakness alone does not qualify as a trading signal. Because the wave analysis on shorter timeframes could elaborate more about the strength or weakness of the opposite currency. Therefore a comprehensive strategy is the only way to enter trades, even if markets move in the expected direction.
  • This is just an opinion about what I personally will consider when entering trades on yen crosses. You can agree, disagree or even not have an opinion at all. Similarly, you are free to like, dislike and debate this opinion.
  • Elliott wave analysis and wave counts provided here (and throughout the entire site) are my own. I could not care less about what the Elliott wave analysis or the wave count of other prominent traders or websites. If you disagree, please don’t email or contact in private. If you have a different view (or even the same view with different reasons) you are most welcome to discuss it in the comments section below.
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