EUR/JPY, AUD/JPY and GBP/JPY Forecasts – Yen on the Back Foot in Early Wednesday Trading

EUR/JPY Technical Analysis

The euro has rallied quite a bit during the Wednesday session as we broke above the Tuesday session and now it looks like we are threatening the 185-yen level. The euro has been getting a bit of a reprieve against the Japanese yen multiple times over the last couple of months as the interest rate differential continues to favor the Europeans despite the fact that the European Central Bank is relatively flat.

This suggests that we have more of a carry trade and risk on type of attitude. It is worth noting that the 181-yen level has been supported extending all the way down to the 180-yen level.

AUD/JPY Technical Analysis

The Australian dollar has broken to a fresh new high against the Japanese yen, and that should not be a surprise, as the Reserve Bank of Australia is expected to raise rates further this year. And of course, the Bank of Japan has the same issues that it structurally has with the lack of ability to truly raise rates with the massive amount of debt that the Japanese economy is under.

With the Japanese yen under quite a bit of pressure around the world and the Australian dollar being fairly strong, it makes sense that we continue to go higher. Based on the measured move, 112 would be your first target from the consolidation we broke out of but really, I think we go higher than that.

GBP/JPY Technical Analysis

The British pound has had a couple of stellar days in a row already against the Japanese yen this week and it looks like we are going to try to take out the 212-yen level. If we can get above here, then 214 is your next target. 215 is a major resistance barrier. Anything above that kicks off a much longer-term rally.

I do believe that the Japanese yen is in serious trouble and would watch for example the US dollar trade against the Japanese yen. If it can break above the 162-yen level, we could see a multi-year move against the Japanese yen in most currencies. Remember, all of these pairs have one thing in common: you get paid at the end of the day to hold onto them.

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