For this longer term view of the Japanese Yen, I have decided to use the Monthly Chart! The story of 2014 for this pair consists of two parts.
The first is the continued consolidation seen late last year but at a higher level – the 101.00 – 105.50 area.
The second consists of the explosive move up over 105.50 which though touching the significant resistance at 120.00 (though not yet closing even at least once over it on a Monthly basis) was more importantly highlighted last year by me in the following part of my Jan 2013 review ‘Topside, well there is only one real level to look for & that’s the big 50% Fib of 1998 – 2011 move at 11.47!’
We closed easily over that level which signifies to me the strength of this rally and how the next Fib resistance of the same move at 120.00 ought not to present too much of a problem. The real next area to look at will be the 124.00 area for two reasons, the first is because of the 2007 high at 124.17 and the second is because of the action Q2 2013 – Q3 2014 – is this a possible Halfway Hesitation area in the move higher?
If it is then a conservative target would put the 2nd leg at least at 124.00. However, this can also be counted up to 126.00 or even 129.50, all due to the fragmented nature of the base & the HH itself! With all MAs pointing upwards & the Golden Cross of the 3 Year MA up over the 5 Year MA, I am loathe to suggest anything of a bearish nature at the moment ahead of a test of 124.00.
However, my cautious nature demands it so look for a retracement of the HH move on any consecutive closes below the original 111.47 50% Fib and also further on consecutive closes below the 1 Year MA (currently 108.16). Bullet point needless to say stays in full bullish mode!
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