Bigger picture view in $/yen remains unchanged as the market is trading within the 87.15/94.60 range since Dec. Though the series of 3 wave moves (a-b-c’s) suggests an eventual downside resolution, been warning that there is scope for a final test of the ceiling at 94.60 first (see “ideal” scenario in red on daily chart below). Currently, the market remains well bid after the last week of sharp gains (interestingly, despite a selloff in US/global stock markets), and is quickly approaching the ceiling of the range. Still long from the Feb 2nd buy at 89.50 and to compensate for the rising risk in the upside, would use an aggressive stop on a break below the week long bullish trendline (currently at 92.00/10 and rising rapidly). Also, would stop on an intraday break because if the ceiling of the range at 94.60 does indeed hold, the market could reverse sharply.
Longer term, no change as the market continues to chop since achieving the long held, longer term downside target at the base of the 3 year bearish channel in mid Dec (then near 87.00). Looks like the market may be forming a large falling wedge for nearly the last year, generally seen as a bottoming pattern and suggesting an eventual, sharp upside resolution of the ceiling (currently at 94.50/95.50, also the top of the multi-month range, see shorter term above). However, there is scope for a final downleg back to the 87.15 lows, and even the base of the wedge first (currently at 85.00, see “ideal” scenario in red on weekly chart/2nd chart below). Note too that this fits the nearer term view of a final downleg to new lows (see shorter term above). So for now for the longer term, would maintain the neutral bias but with the expectation of a very good, longer term buying opportunity a few weeks (or more ahead), and likely at level below the 87.15 lows.
