USD/JPY, EUR/JPY, CHF/JPY

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Japanese yen is once again weakening against major currencies. Few days back I posted the USD/JPY chart showing the range bound price action and drew attention to a possible breakout. Yesterday USD/JPY cleared the resistance at 99 levels. Similar price action could follow in EUR/JPY and CHF/JPY as they both get ready to breakout from their four-month long consolidation ranges.

EUR/JPY continues to consolidate between 132 and 130. Breakout should follow on this pair in the following days. Unlike USD/JPY and EUR/JPY, CHF/JPY has a horizontal resistance at 107.5. As we are seeing USD/JPY breaching the trend resistance at 99 levels, other yen cross rates should follow with similar price action.

USDJPYEURJPYCHFJPY

Practice vs. Talent

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Starting from this week, I’ll share with you some interesting books, videos and articles under the category of self-development. I believe they will have a positive impact on your analysis and trading. This is an inspiring video that will challenge the way we look at talent and practice in our lives. We can become masters of what we do by constantly practicing our craft. By repeating the same task that we love over and over again we can actually develop a skill which we are not born with but we build after continuous practice. This could be trading, technical analysis any sort of art, sports or cooking. All it takes is to practice, practice and practice.

[youtube=http://www.youtube.com/watch?v=z3Hwa_ZAoCs&start=54&end=540&rel=0]

USD/TRY

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USDTRY I

USDTRY II

Since April Tech Charts frequently updated the USD/TRY analysis and drew attention to a weakening Lira against the U.S. dollar (Apr 22, May 13, May 28, Jun 20)  . Breakout above 1.83 levels was followed by a sharp rise towards 1.92 levels which was also breached on the upside after a short consolidation. Latest breakout from the flag formation on the daily chart resulted in another rally towards 2.07 levels. Since the beginning of 2013, USD/TRY has formed an upward trend channel and with the latest rally the cross rate reached the upper boundary of this steep trend channel. Technical outlook still remains negative for the lira. However we can conclude that the current technical readings are overextended and suggest a short-term stability at these levels. 1.92-1.95 area will be strong support in the short/medium-term. 1.75-1.83 area will be strong support in the long-term. 

USD/JPY

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USDJPY

In November 2012, Japanese yen started weakening against the U.S. dollar. Cross rate started rising from 77 levels and reached 104 levels in almost six months. This was a sharp rally and was followed by a lengthy consolidation. Price action is cyclical. It will have high volatility, trend periods that are followed by low volatility, trading ranges. USD/JPY is going through a quiet period (trading range) which is likely to be interrupted by another strong trend period. Over the past few months the cross rate has been consolidating in a tight range and now it is ready for a strong directional move. Breakout above 99 levels will send the USD/JPY towards 104 levels once again. Breakdown below 96 will challenge the 200 day moving average at 94.5 and possibly target lower levels. USD/JPY is on our watchlist for a possible breakout.  

WTI CRUDE OIL

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WTI CRUDE OIL

WTI CRUDE OIL II

This will be an important week for Crude oil. WTI crude oil continues to consolidate directly above the long-term symmetrical triangle. After its  breakout above $98 levels and $104 levels, WTI crude oil formed a bullish chart pattern as part of the continuing uptrend. Short-term bullish flag is signaling a pause before the uptrend resumes. WTI should clear $109 levels to target $110-$115 area, and as long as price remains above $104, we should expect higher prices in the short/medium-term. Failure to break above $109 levels could result in further sideways consolidation between $104 and $109.

USD/INR (U.S. DOLLAR/INDIAN RUPEE)

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USDINR

Earlier in May, Tech Charts blog followers read three different updates on the USD/INR suggesting strong U.S. dollar versus the Rupee (May 7, May 13, May 28). Since then the cross rate had a strong breakout and entered into a parabolic upward move. Over the past month price reached a strong trend channel resistance between 65 and 66 levels. Parabolic moves are usually followed by sharp setbacks. The latest rally may near completion with a buying climax similar to previous sharp rises in 2011 and 2012. Uptrend is over extended and we can see stabilization and consolidation between 60 and 66 levels.

(THAILAND) SET INDEX & (TURKEY) BIST 30 INDEX

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BIST 30 II

THAILAND SET INDEX III

Emerging markets are taking a hit with their bond, currency and equity markets. We are seeing clear technical damages on mainly emerging asia and the rest of the emerging markets. Two equity indices that show similarities are Thailand’s SET index and Turkey’s BIST 30 index. Both indices had strong uptrend between 2009 and 2013. They were the best performing markets. Though this might be ending soon. Both SET index and BIST 30 breached strong long-term trend supports. They are clearly below their 200 day moving averages and downward momentum is picking up over the past few days. On both indices MACD generated sell signals below 0 level. Technical outlook is negative.

What would change the outlook back to neutral/positive? Turkey’s BIST 30 index should climb back above its 200 day moving average at 95K and Thailand SET index above 1,450. Before that happens we follow these two markets with a negative outlook.

S&P GSCI (Commodity Index)

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S&P GSCI II

Commodities have clearly underperformed equities over the past two years. This is due to correction in metals, already weak agricultural commodities and relatively quiet energy prices. None of the commodity index components had a strong enough trend to force the S&P GSCI out of its consolidation range, though signs show that this might be changing. Low volatility on the commodity index suggests a strong trend period should follow in the next few months. Breakout above 655 will be extremely bullish for the commodities – likely to put an end to the two-year sideways consolidation. Breakdown below 600 levels will result in a downward trend and target 500-550 area in a short period of time.

U.S. JOBLESS CLAIMS

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US JOBLESS CLAIMS

Year 2013 could mark the medium/long-term low for the U.S. weekly jobless claims. Over the past 4 years, jobless claims trended lower from 680K levels to 330K levels. This is a significant improvement given the magnitude of the historical swings on this economic time series data. U.S. weekly jobless claims reached an important trend support and if this trend line acts as support as it did in 2000 and 2006, we should expect higher levels in the last quarter of the year. Breakdown below this trend line at 320K levels could help the jobless claims ease towards the horizontal support at 280K.

S&P GSCI (COMMODITY INDEX)

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S&P GSCI

S&P GSCI (Commodity Index) is in a clear downtrend. Well-defined downward sloping trend line acts as strong resistance at 655 levels. Over the past two years trend line acted as strong resistance and each counter trend reaction reversed from the strong trend resistance. It is now clear that a breakout above this technical level will reverse the medium/long-term downtrend. I continue to watch commodities with a negative technical outlook but also keep a close eye on this strong trend resistance in case we see a sharp reversal and a decisive breakout above 655 levels.