Yen pairs offer some intrigue in trading this week

I’m going to split this into two parts, that being commodity currencies against the yen and the euro against the yen. So, let’s dive into the first part with AUD/JPY.

Amid Russia-Ukraine tensions, the aussie and kiwi have been rather resilient performers in the past few weeks and the price action in this chart exemplifies that. Any hit lower in the past two weeks were held by buyers around the 200-day moving average (blue line) before looking for a push higher again.

The trendline resistance (white line) eventually gave way and even the gap lower on Monday was easily recovered. Since then, it has been one-way traffic as buyers will now look to take aim at the October to November highs near 86.00.

That said, the risk to any further upside leg of course is the situation between Russia and Ukraine.

Moving on to NZD/JPY:

As mentioned above, the kiwi has been another standout performer in the wake of Russia-Ukraine tensions and this chart also underscores that well. Price kept recovering strongly amid any setbacks but only to fall short of breaching the key daily moving averages. But the shove higher yesterday looked to validate buyers’ conviction amid a push above both the 100 (red line) and 200-day (blue line) moving averages. Keep above the former and buyers will see a more bullish bias.

That will be the key level to watch in the sessions ahead and particularly into the daily close.

If successful, buyers can start to take aim at the January highs @ 79.22-23 next.

Moving on to CAD/JPY:

The pair has been caught in a bit of a wedge and the latest downside move last week saw buyers defend the drop at the 200-day moving average (blue line) and also at trendline support around 89.35.

Since then, buyers have capitalised on higher oil prices and a softer yen in a push towards the upper trendline resistance @ 91.65 currently. If buyers can break above that and more convincingly the 92.00 level, that will allow for more conviction for a shove higher to retest the October highs of 92.87-02 next.

Now moving on to the next part which is EUR/JPY:

Since the topside move for the pair was rejected three weeks ago at the trendline resistance (white line), it has been one-way traffic on the way down as risks mount for Europe amid the Russia-Ukraine situation. ECB rate hike bets are pared back while European economies are also feeling the bite of sanctions against Russia.

A rush into the dollar, yen and franc – away from the single currency – is also perhaps part of the factor considering exposure risks.

But from a technical perspective, the euro is somewhat holding on for now. EUR/JPY tested the November to December lows @ 127.38-49 before bouncing a little yesterday but the pressure is still on.

As the euro is in a rough spot technically elsewhere, a prolonged war between Russia and Ukraine and more biting sanctions and counter-sanctions could prove detrimental for the single currency.

If the support level above gives way for EUR/JPY, it’s a slippery slope on the way down next.