USD/ZAR & USD/IDR

Emerging market currencies are going through challenging times as they lose ground against the U.S. dollar. After two decades of massive depreciation against the U.S. dollar (1980-2000), most of the EM currencies stabilized and started moving sideways in a wide range. Latest sell-off pushed the cross rates to test their upper boundaries. South African Rand reached the upper boundary of its contracting range (possibly a symmetrical triangle) and Indonesian Rupiah the upper boundary of its flat consolidation range. The question now is whether the decade long consolidations will resume or will be followed by strong breakouts. These long-term charts should be on our watch-list in the following months.

COPPER

Copper prices might be forming a medium-term base above 3 levels. 3 level acted as strong support and it was tested for 3 times over the past two years. Inverted head and shoulder chart pattern has a trend resistance (neckline) at 3.4 levels. Breakout above this level will clear the neckline and the 200 day moving average. Such technical action will be positive for Copper prices and could be the beginning of a larger-scale uptrend.

INDIA BOMBAY SE SENSEX INDEX

It has been a difficult month for the emerging market currencies and especially for the Indian Rupee. Sharp depreciation of the currency and rising yields have caught the attention of the mainstream media. Tech Charts frequently updated the outlook on the rupee starting from 55 levels. While the Indian currency had a sharp depreciation, equities held well and moved in the opposite direction. India’s Sensex index is now closer to its historical high levels which is a strong multi-year resistance at 21,250 levels. This level was tested in the beginning of 2008 and 2011 and held as strong resistance. Breakout above 21,250 levels will be extremely bullish for the Indian equity market. Such breakout to historical high levels occurred in the South African All Share Index back in 2012 and resulted in a sharp multi-month rally. Due to its similarity in technical action I’m posting a chart on the South Africa All Share Index. In the following weeks we should watch 21,250 levels on the Sensex.

USD/JPY, EUR/JPY & CHF/JPY

Earlier during the month I’ve analyzed the Japanese yen cross rates. USD/JPY, EUR/JPY and CHF/JPY all showed weakness for the japanese yen in the coming weeks. First USD/JPY breached its resistance and cleared its consolidation range. Now we are seeing further strength in USD against the JPY followed by a similar breakout on the EUR/JPY chart.

#USD / #JPY#EUR / #JPY and #CHF / #JPY charts suggest weak yean agains major currencies in the following weeks. http://t.co/gP360AmIyH

— Aksel Kibar, CMT (@TechCharts) September 3, 2013

Below are some updated charts on the Yen cross rates. Currently CHF/JPY is challenging its strong horizontal resistance at 107.5 levels.

USD/JPY, EUR/JPY, CHF/JPY

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.