Yesterday we looked closer at the Swiss franc situation and today, we will analyze Japanese yen. JPY Index is showing the first signs of bullish sentiment. We have two major positive signs at the moment: the defense of the horizontal support around the 23.6% Fibonacci and the breakout of the mid-term down trendline, connecting lower highs since the beginning of February. Buyers have just one obstacle left – 38.2% Fibonacci. Once the price closes a day above that one, the buy signal will be triggered.
AUD/JPY: A few days ago, we were bearish and the pair did not disappoint us at all. After the bigger flag, the price created a smaller wedge and yesterday broke its lower line. With that, the current sentiment is negative.
USD/JPY price is trying to create a head and shoulders pattern. On this pair, we don't have a huge slide right now, as both currencies are strong. The recent appetite for Dollar is significant too. Potential for a drop is here though. As you can see, a very similar pattern was already present here in January and resulted in a nice drop. Sellers can potentially count here on around 100 pips but first, we should see the breakout of the neckline. As long as we stay above the blue line, buyers can still be optimistic.