From Correlations, USD/JPY solidly owns EUR/JPY and GBP/JPY at + 98% and + 90%. Confirmation is established as EUR/USD runs minus 91 % to EUR/JPY and GBP/USD tracks minus 63% to GBP/JPY. USD/JPY ownership at high correlations could easily sustain for long periods in the future because it takes vital break points to reverse positive to negative and vice versa. The + 50% bound must break and that’s a long way from current prices especially when range points are far away. Currency pairs are currently trading average points inside wide ranges.
The major problem to USD/JPY is break points from 112.68 to 113.63. EUR/JPY in comparison, break points are located from 120.37 to 121.45 then comes GBP/JPY from 139.49 to 140.77. The ranges are 95 USD/JPY, 108 EUR/JPY and 126 GBP/JPY. All pairs trade within respective ranges and most restricted range is USD/JPY yet USD/JPY is the pair that must lead.
USD/JPY now trades an 85 pip range from 113.07 to 112.22. The protection to 112.22 is 112.37 then below 112.22 comes 112.10, 111.96, 85 and 111.73. Below 111.73 then lookout 110.70’s.
On the topside 112.86, 112.97 and 113.02 provide headwinds to a 113.07 break. Again, USD/JPY must lead the range break charge and EUR/JPY as well as GBP/JPY will follow. A march higher must come from the USD side of this story.