Eur/JPY 1,500 pip prediction

This is earnings week. Earnings are likely to be poor. Lets see if the markets continue to ignore the poor economic data. Reactions will probably be positive since expectations are so low.

I would love to see another divergence between the Yen's correlation to risk aversion. There are still many reasons for a bear market. And we have not yet begun to see any important economic figures begin to trend positively to say otherwise. However, from a technical and COT data perspective, buying on the dips on the yen crosses looke like an excellent play. If investors begin paying more attention to the poor fundamentals in the Japanese economy, as they were pre-FOMC quantitative easing announcement, we would easily see huge weakness grip the yen.

I have already exited my call at 132 to make a small profit. And am now buying another call here at 131 with a first target for 140 and then 141. If you look at the daily chart you see that this pair is still in an upward trending channel. Any return to the lower trendline is still a good place to buy to target the upward trendline. Now something to take not of is that we still have haven't really cleared the 8,000 level here on the dow. And I am anticipating a possible move down to 130 before moving back up.

Updating. Currently my call which expires on the 14th that I bought with a strike @ 131.00 has only a small profit due to the erosion in time value. I expect some resistance here at this 135 region possibly. I still expect bullish movement to 150 and will renew my option this next month to target 150 on the double bottom. 125 was able to hold which was a good sign.

I agree with you - a lot of traders overlook the time factor. Many of the electronic trading systems large organisations use are based around time - they use fibonacci numbers as indicators to enter / exit positions. I'd expect a run upto 137 which will follow a period of consolidation.

Good luck

Cheers WG

So its been about 2 months since I made the 1,500 pip prediction on the EUR/JPY. Taking a look at the weekly chart you can see that we are in a consolidation phase below 135 in a descending channel and we can see that we are forming a flab pattern. A break of 135, (a close on the weekly chart for confirmation) would target 145-150 while a close below the bottom line of the descending channel on the weekly would target 118.

I am biased towards a break to the upside as risk appetite is returning to the market and will be buying on bounces off the bottom line of the channel and on a break of the 135 resistance line targeting 145.

Usually i don't make predictions, but i think you are right, and more important, is the eur-usd, that will make a huge up-move in the next weeks (as i think)! Bulls are coming...

Still long from 130 and targeting 145. As you can see we finally made some headway as we broke through the flag pattern on the weekly chart to the upside. We are getting a bit of a pull back this week; however, note the flag pattern projects price action to about 150.

So still goin for 1,500 pips to 145.